September 27, 2012 / 3:58 PM / 5 years ago

Australia & New Zealand Banking settles on limit violations: CFTC

WASHINGTON (Reuters) - Australia and New Zealand Banking Group Ltd (ANZ.AX) agreed to pay $350,000 to settle charges it violated position limits in the wheat and cotton futures markets, the U.S. Commodity Futures Trading Commission said on Thursday.

The financial services company exceeded limits in wheat futures trading on the Chicago Board of Trade on multiple occasions in August, 2010, the CFTC said.

The firm also surpassed position caps in cotton futures trading on ICE Futures US, which is owned by IntercontinentalExchange Inc. (ICE.N) in February, 2011. The Chicago Board of Trade is owned by CME Group Inc. (CME.O)

The order was filed on Wednesday and is the latest in a flurry of position limits settlements announced by the CFTC in the lead-up to the October 12 effective date for new caps on the number of contracts that traders can hold in certain markets.

On Tuesday, the CFTC announced that a little-known Shanghai, China firm, Sheenson Investments Ltd, and its founder, Weidong Ge, had agreed to return $1 million in ill-gotten gains and pay a $500,000 civil penalty for exceeding federal limits on speculative bets in soybean oil and cotton futures.

Last Friday, the agency ordered Citigroup Inc (C.N) and a subsidiary to pay $525,000 for violating limits in the wheat market.

The settlements come before a new set of trading curbs kicks in October 12. The rules, which aim to rein in speculation and limit price spikes, were included in the 2010 Dodd-Frank financial reform law and finalized by the agency last October. Additional caps are expected to kick in next year.

Financial industry groups have sued to stop the new position-limit rules from taking effect, saying they would irreparably harm the marketplace and that the CFTC failed to sufficiently weigh the economic consequences of the rule, as is required by law.

Traders and some Republican lawmakers have argued there is no evidence that speculators inflate prices.

A judge has not yet ruled in the case, which was filed by the Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association in December.

Reporting By Alexandra Alper; Editing by Gerald E. McCormick and Jeffrey Benkoe

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