17 December 2008

2 minute read

North America

DFA is one of America's leading milk marketing cooperatives and is owned by 18,000 dairy farmers nationwide.

Without admitting or denying the CFTC's findings in the administrative order, DFA and two of its former officers agreed to pay a negotiated aggregate civil monetary penalty of $12 million.

The Cooperative also agreed to not engage in speculative trading in milk futures contracts for two years and to retain a monitor to review its trading activities on the CME during that period.

DFA President and CEO Rick Smith said that agreeing to the settlement was in the best interests of the Cooperative and its members. The long-pending probe was expensive and diverted time and resources from DFA's main mission – serving its members.

"Settling this matter will allow us to focus wholly on serving our members and moving the Cooperative forward," said Smith, who took the helm of the Cooperative in 2006, years after the trading activity in question.

"The transactions addressed by the settlement took place over a one-month period more than four years ago," said Smith.

"We have fully cooperated with the CFTC’s investigation and wanted to put this matter behind us."

Prior to reaching the settlement agreement, DFA management voluntarily developed and implemented new policies and procedures designed to ensure that all trading complies with both the spirit and the letter of the law.

Smith said that today's DFA Board and management follow corporate values that stress openness, transparency and integrity.

"We are focused on operating in the best interest of our 18,000 dairy farmer owners. We are looking beyond past problems and forward to our bright future," said Smith.

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