Back to the Marc Rich Days as U.S. Probes Commodity Traders – by Andy Hoffman, Javier Blas and Mark Burton (Bloomberg News – March 25, 2019)

Executives fear U.S. authorities are zeroing in on the industry once again

Not since the days of fugitive oil merchant Marc Rich has the commodities trading industry faced so much global scrutiny.

The biggest independent oil and metals trading houses, including Vitol Group, Trafigura Group Ltd., Glencore Plc., Mercuria Energy Group Ltd. and Gunvor Group Ltd., are facing bribery and corruption investigations in jurisdictions ranging from Brazil to Switzerland and, most importantly, the U.S.

The multitude of investigations echoes the early 1980s, when then-U.S. attorney Rudy Giuliani prosecuted Rich, founder of the company that became Glencore, for tax evasion and buying oil from Iran in defiance of sanctions. The saga, which brought Rich infamy beyond the obscure world of commodity trading, has long haunted public perception of the industry.

Commodities trading executives now fear U.S. authorities including the Justice Department and Federal Bureau of Investigation are zeroing in once again, according to a dozen interviews with industry officials, bankers and consultants.

The U.S. commodities futures regulator, which hasn’t traditionally enforced foreign bribery laws, has also signaled that it could step into the arena. This month, its enforcement head highlighted what he said was the problem of foreign bribery in commodities markets.

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