In the amended lawsuit filed by AOT, the company did not allege that ADM stopped manipulating the price of ethanol derivatives in September 2019. “Only that prices rebounded immediately after this lawsuit,” said the court in its order, “when ADM temporarily eased off in light of additional public scrutiny.”
AOT’s Amended Complaint adds, “Indeed, it was this price rebound that caused ADM to suffer the losses that Kuffel and his superiors likely attempted to cover up through the accounting misconduct that led to Kuffel’s suspension. ADM attempts to explain the significance of the suspension with self-serving factual assertions that the policy violation only pertained to the values at which the transfers of ethanol derivatives were made. the record that reveals the exact nature of the policy violation – Kuffel could not recall the details.
AOT is one of several plaintiffs who sued ADM alleging that ADM manipulated ethanol prices, a violation of the Commodity Exchange Act. Specifically, AOT alleged that ADM removed the daily ethanol benchmark price in favor of its short positions.
AOT filed its lawsuit just before Kuffel was suspended, according to the order.
According to the May 3 court order, Kuffel said he was acting under the direction of either Rachel Hudson or Chris Cuddy, both of whom are Kuffel’s superiors at ADM.
AOT alleged that Ray Bradbury and Kuffel, as “senior members of ADM’s Ethanol Group”, worked to artificially lower the price of ethanol derivatives. Hudson passed away recently after working for 17 years at ADM.
ADM’s lawyers argued that the May 3 court ruling released information that should have been sealed as part of the 2019 order.
AOT alleged that ADM’s shares benefited the company by increasing the value of ADM’s “short” or “hedged” positions in ethanol. “In other words, plaintiff alleges that Bradbury and Kuffel artificially slowed ethanol prices for the benefit of ADM’s investments,” the court said in its May 3 ruling.
The court said AOT should be given the opportunity to determine whether Kuffel’s suspension was somehow related to the alleged price manipulation scheme.
AOT filed a class action lawsuit in May 2020, alleging ADM manipulated the market at the Argo, Illinois, terminal by flooding the fuel terminal with low-cost ethanol from November 2017 to March 2019.
The Argo terminal is the daily place for ethanol trading. The court said the specific trades in question took place during the 30-minute “market at close” or MOC window.
The trading window is considered crucial as trading is used to set the Chicago daily benchmark price to determine the value of Chicago ethanol derivatives.
Similar lawsuits have been filed by Wisconsin ethanol producers United Wisconsin Grain Producers, Didion Ethanol, Ace Ethanol, Fox River Valley Ethanol, Badger State Ethanol and Iowa producer Pine Lake Corn. Additionally, a lawsuit filed by Green Plains Inc. in Nebraska was transferred to the Illinois court.
Learn more about DTN:
“ADM Ordered to Release Employee Documents”, https://www.dtnpf.com/…
Todd Neeley can be reached at [email protected]
Follow him on Twitter @DTNeeley
(c) Copyright 2022 DTN, LLC. All rights reserved.