Mining, Commodity Trading Company Glencore Pleads Guilty to FCPA, Market Manipulation Charges

Multinational commodity trading and mining company Glencore International pleaded guilty in U.S. District Court in New York May 24 to violating the Foreign Corrupt Practices Act, the U.S. Attorney's Office for the Southern District of New York announced. Glencore Ltd. also pleaded guilty in the District of Connecticut to conspiring to manipulate commodity prices. Collectively, Glencore International and Glencore agreed to pay over $1.1 billion to settle the investigations into bribery and commodity price manipulation.

According to the plea agreement, Glencore engaged in a conspiracy for over a decade to pay in excess of $100 million to third-party intermediaries, intending for a large portion of the payments to be used for bribes in several countries. The targeted countries of the bribes include Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela and the Democratic Republic of the Congo.

In West Africa, Glencore paid just under $80 million to obtain and retain business with state-owned businesses from 2007 to 2018. The company hid the bribes by using fake consulting agreements, paying inflated invoices and using intermediaries to make the bribe payments. Glencore and its U.K. subsidiaries signed agreements to buy crude oil and refined petroleum products from Nigeria's state-owned oil company, paying more than $52 million. Glencore and its subsidiaries worked with intermediaries to secure crude oil contracts, knowing that the intermediaries would make the bribe payments to Nigerian officials.

Glencore pleaded guilty to one count of conspiracy to violate the FCPA and agreed to pay a fine of $428.5 million along with acknowledging the forfeiture liability of $272 million. The company reached separate resolutions with the Brazilian Ministerio Publico Federal and the Commodity Futures Trading Commission.

Under the commodity price manipulation case in Connecticut, from 2011 to 2019, Glencore conspired to manipulate two benchmark price assessments for fuel oil products. Glencore employees sought to enrich themselves by increasing profits and reducing costs on contracts to buy and sell fuel oil along with derivative positions held by the company. The price of the contracts and derivative positions were set by reference to the benchmark price assessments rigged by the company. Glencore pleaded guilty to one count of conspiracy to engage in commodity price manipulation, agreeing to pay a fine of $341 million and forfeit $144 million.

“The rule of law requires that there not be one rule for the powerful and another for the powerless; one rule for the rich and another for the poor," Attorney General Merrick Garland said. "The Justice Department will continue to bring to bear its resources on these types of cases, no matter the company and no matter the individual.”