The U.S. Commodity Futures Trading Commission, CFTC said has issued an order filing and settling charges against Davisco Foods International, Inc. for unlawful trading in commodity futures.
According to the CFTC, Davisco Foods is based in Le Sueur, Minnesota, for failure to register with the CFTC as a Futures Commission Merchant (FCM).
The CFTC Order finds that for a number of years, from at least May 2011 and continuing through at least October 2014, Davisco accepted orders from its milk suppliers for the purchase and sale of CME Class III Milk futures contracts. Davisco executed these orders on behalf of these milk suppliers in Davisco’s own trading accounts. Further, according to the Order, in connection with these orders, milk suppliers received credits and debits to their accounts with Davisco. As such, Davisco acted as an FCM, and by failing to register as an FCM, Davisco violated Section 4d(a)(1) of the Commodity Exchange Act (CEA), the Order finds.
The CFTC Order requires Davisco Foods to pay a $150,000 civil monetary penalty and to cease and desist from further violations of the CEA, as charged.
CFTC Division of Enforcement staff members responsible for this case are Aimée Latimer-Zayets, Danielle Karst, George Malas, A. Daniel Ullman II, and Paul G. Hayeck.
On its website, Davisco Foods it is an international cheese and food ingredient company.
The company was founded in 1943 by Stanley Davis, “with his purchase of the St. Peter Creamery, Davisco is managed by Jon Davis, CEO and grandson of the founder. Davisco has cheese companies in Le Sueur, MN, Jerome, ID and Lake Norden, SD as well as food ingredient companies in Le Sueur and Nicollet, MN, Lake Norden, SD and Jerome, ID. Davisco has sales offices in Minneapolis, Geneva, Shanghai, Singapore and worldwide strategic partners in the Middle East, Japan, China and Africa”, said the disclosure.
The company claimed it processes 11 million pounds of milk per day into cheese and whey products. It has not issued an official statement on the matter.