CANBERRA, AUSTRALIA — The Australian Securities and Investment Commission (ASIC) has launched legal action against two subsidiaries of China-based COFCO International, alleging they manipulated a January 2023 wheat futures contract in Australia.

ASIC, in a report released July 25, alleged COFCO International Australia Pty Ltd. and COFCO Resources SA manipulated Australian commodities contracts 34 times in early 2022 (between Jan. 17 and March 3) by placing orders shortly before the close of the ASX24 derivatives exchange for the day to improperly affect the settlement price.

Joe Longo, chairman of ASIC, said the illegal conduct “erodes trust and confidence in our markets, increases costs for participants, hurts farmers, food manufacturers, importers and exporters, and impacts prices Australians pay at the checkout. We allege these companies engaged in a repeated pattern of manipulation to benefit themselves to the detriment of other participants in the market.”

“Fairness in commodities markets has never been more important,” he added. “Consumers and economies have felt the impact of distorted supply chains through the pandemic, the Russia-Ukraine war and through increases in the cost of living. We have the systems, people and powers to identify misconduct and will not hesitate to take action against those manipulating our markets.”

According to the court filing, COFCO wheat trader Nicholas McGraw is alleged to have executed the trades on behalf of the company through JP Morgan Securities Australia, its broker. In May, ASIC fined JP Morgan $775,000 for allowing the orders to be made using its platform.

ASIC said the matter will be listed for a case management hearing on a yet-to-be-determined date.