Dissenting Statement of Commissioner Scott D. O‟Malia

In the Matter of ConAgra Trade Group, Inc.

I dissent from the Commission‟s acceptance of this offer of settlement and entry of the 

Order in this matter because I believe that the Order sends the wrong message about what is 

acceptable behavior in the markets we oversee. In my opinion, this case is better pursued as an 

attempted manipulation. Instead, the Commission today votes to accept ConAgra Trade Group, 

Inc‟s (“ConAgra”) offer of $12 million and the implementation and maintenance of a compliance 

program to settle the Commission‟s inquiry resulting from their activity in January 2008 alleged 

to have caused a non-bona fide price in violation of Section 4c(a)(2)(B) of the Commodity 

Exchange Act. 

I have reviewed this case with extraordinary interest. The crude oil markets are vital to 

our nation‟s economy and can affect all American households. I share my fellow 

Commissioners‟ dedication that all markets we oversee, especially the vital energy markets, are 

free from abuse and manipulation. In order to do our job we need to ensure the Commission is 

effectively communicating the behavior that is not acceptable in these crucial markets. We need 

to appropriately punish those who violate the law. The sanction imposed in any settlement is 

part of the overall communication to the public about what the Commission considers to be the 

gravity of the violation.

The acts alleged to have been committed by ConAgra are stated on pages 2 and 3 of the 

Order. Some details of the irresponsible behavior are included relating to ConAgra‟s efforts to 

be the first trade at the $100 level in the crude oil contract traded on the NYMEX in January of 

2008. 

The Commodity Exchange Act provides enforcement tools to condemn and deter truly 

disruptive practices (made even stronger with the recent passage of the Dodd-Frank Wall Street 

Reform Act and Consumer Protection Act) and provides powerful authorities and penalties with 

respect to manipulation and attempts to manipulate. The Commission has made clear that 

“sanctions in enforcement proceedings are imposed „to further the Act‟s remedial policies and to 

deter others in the industry from committing similar violations.‟” In the Matter of Michael 

Staryk, 2004 WL 1657544 (CFTC July 23, 2004), citing In re Volume Investors Corp., [1990-

1992 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶25,234 at 38,679 (CFTC Feb. 10, 1992). 

Determining the level of gravity of the offense is the first step to setting an appropriate penalty

and is the only factor mentioned specifically mentioned in Section 6(e)(1) of the Commodity 

Exchange Act. The Commission has rejected a formulaic approach to determining gravity in 

assessing a penalty and has considered the following factors: the relationship of the violations to 

the regulatory purposes of the Act, respondents‟ state of mind, the scope and frequency of the 

wrongdoing, respondents‟ post-violation conduct, and the financial consequences flowing from 

respondents‟ wrongdoing. In the Matter of Howard Miller, 2004 WL 1637297 (CFTC July 23, 

2004). In light of this, the settlement is a failure to use the powerful authorities and penalties in 

the Commodity Exchange Act.
While the Commission has agreed to settle a charge of a non-bona fide price for an 

extremely high settlement amount as compared to other disruptive trading practice settlements, I 

would have preferred the Commission vote to pursue a case for attempted manipulation. 

Shoehorning the facts alleged in the Order into a disruptive trading practice charge and coupling 

that with a large dollar amount fails to send the appropriate message to the marketplace--that 

manipulative behavior will not be tolerated. To avoid litigation and in the interest of both parties 

to save resources, an attempted manipulation case might have settled for an amount closer to $12 

million. But I cannot support a settlement for an amount of money with no relationship at all to 

the gravity of the facts and the violations alleged to have occurred in the Order. Today‟s vote is 

not effective in its market message. The settlement provides no guidance on why the described 

activity constitutes such a severe violation of the Commodity Exchange Act as to warrant a 

historic settlement level.