The Vitol Case

On December 3, 2020, the U.S. Commodity Futures Trading Commission (CFTC) announced a settlement with Vitol Inc., a Dutch owned oil trading firm. The case is historic, marking the first enforcement action ever brought by the CFTC involving foreign corruption.  Attorneys working with the International Whistleblower Protection Alliance represented the whistleblower in the Vitol case who provided the critical evidence to the CFTC resulting in a $95 million penalty for commodities frauds, and another $135 million to the Justice Department for bribery and other corruption related violations.

Among the corrupt activities the CFTC held constituted fraud in the global oil markets were:

• Bribery and Kickbacks paid to employees of state-owned entities in Brazil, Ecuador, and Mexico;
• Fraudulent Concealment by funneling bribes through offshore bank accounts and shell companies;
• Benchmark Manipulation: Vitol attempted to manipulate two S&P Global Platts fuel oil benchmarks to benefit its own trading positions.

A New Enforcement Frontier: Analysis from Gibson Dunn

Gibson, Dunn & Crutcher is among the world’s leading law firms representing corporations accused of corrupt activities. The Gibson Dunn firm explained that the Vitol case signaled “a major shift in how U.S. regulators are targeting international corruption,” resting on an “aggressive theory that treats foreign corrupt practices as a form of fraud and manipulation prosecutable under the Commodity Exchange Act.”

Significantly, Gibson Dunn recognized that the financial incentives offered by the Dodd-Frank whistleblower program will “significantly increase the amount of information the CFTC receives,” warning that increased whistleblower incentives will  “enhance the agency’s ability to bring more enforcement actions related to foreign corruption.”