Commodities Manipulation


Practice Area

What is Commodities Manipulation?

Commodities manipulation occurs in various ways, and the Commodity Exchange Act (CEA) has been put in place to prohibit the manipulation of prices, commodities, and potential contracts. However, that does not mean that commodity manipulation doesn’t still occur. Some forms of manipulation are: 

  • Cornering: A single entity controls the total supply of a financial commodity which leads them to dictate the commodities market price. 
  • Front Running: A broker executes a trade with the knowledge that has not been made public, which impacts the market. 
  • Wash Trading: A party makes moves to create inorganic movements in volume and price. 
  • Pumping and Dumping: A party or broker uses their position in a financial market to artificially inflate the price of a certain commodity through fraudulent promotion before selling it. 
  • Benchmark Distortion: A party manipulates a benchmark that is determinative of the price of a financial commodity. 
  • Pinging: A party submits and cancels a large number of small orders for financial commodities to induce others in the marketplace to react and disclose their trading intentions.
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What Would be Considered a Violation of the Commodity Exchange Act?

Since the Commodity Exchange Act was enacted to regulate commodities and futures trading in the United States, it’s mainly responsible for regulating agriculture, global markets, energy, technology, and environmental markets. There are many ways the Commodity Exchange Act can be violated: 

  • Fraudulent Activity
  • Fraudulent Solicitation
  • Misappropriation of Customer Funds 
  • Issuing False Customer Account Statements
  • Mishandling Customer Funds 
  • Ponzi Schemes 
  • Affinity Schemes

What Happens if My Rights are Violated Under the Commodity Exchange Act?

If you want to claim damages due to violations of the Commodity Exchange Act, you could initiate reparation proceedings. During this process, you’ll acknowledge and address any wrongdoings you suspect have occurred in violation of the CEA. You could be eligible for compensation if your consumer rights have been violated under the Commodity Exchange Act.

Should I Hire a Commodities Manipulation Lawyer?

If you’ve been negatively affected by commodities manipulation, the last thing you want to do is face going to trial alone or at all. With Mizrahi Kroub, you can rest assured knowing that you’ll rarely be asked to go to trial and will be kept out of the nitty gritty of resolving your case.


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