Photo courtesy of adm.com
From staff reports
The U.S. District Court for the District of Central Illinois ordered Archer Daniels Midland to release information related to the 2019 suspension of an ADM accountant because of a current lawsuit regarding ethanol markets manipulation. The accountant, Adam Kuffel, was allegedly violating the ADM internal accounting policy in 2019. However, he claims his supervisor ordered him to take the actions that he did. AOT Holding AG is bringing the case. At issue is the violation of the Commodity Exchange. AOT says that Kuffel suppressed the daily benchmark price of ethanol, which lead to the artificially lowering the price of ethanol derivatives, which means ADM investments benefited from the low ethanol price.
“Specifically, Kuffel improperly transferred short ethanol hedges from a ‘mark-to-market’ account to a ‘slotted-futures’ account,” the order said.
“Kuffel testified he was acting at the direction of either Rachel Hudson or Chris Cuddy, both of who are Kuffel’s superiors at ADM. Central to the plaintiff’s theory of the case are the actions of Ray Bradbury and Adam Kuffel (ADM employees).”
The court found that any information related to the manipulation complaint applies to the case
“ADM thus argues that documents and communications related to Mr. Kuffel’s suspension are collateral,” the order said. “In addition, ADM argues that private employment information, such as disciplinary files, raises serious privacy concerns. ADM’s argument fails to meet its burden. Plaintiff’s complaint lists Kuffel as a primary architect of the alleged ethanol-price-manipulation scheme. Now, by ADM’s own definition via its internal policies, it is uncontested that Kuffel engaged in accounting misconduct relating to ethanol trades.”
Reporting the benchmark is important because it is used to set the daily Chicago benchmark price, which determines Chicago ethanol derivative prices. The trading in question occurred during a 30-minute market-on-close window Nov. 2019 through March 2019 at the Argo, Illinois terminal, a daily ethanol trading location.