United States v. AIG Trading Corp.; BP Exploration & Oil, Inc.; and Cargill International, S.A., Civil No. 97CIV5260, (S.D.N.Y., Filed July 18, 1997)

DEPARTMENT OF JUSTICE

Antitrust Division

United States v. AIG Trading Corp.; BP Exploration & Oil, Inc.;

and Cargill International, S.A., Civil No. 97CIV5260, (S.D.N.Y., Filed

July 18, 1997)

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16 (b)-(h), that a Stipulation and Order

(``proposed Order'') and Competitive Impact Statement have been filed

with the United States District Court for the Southern District of New

York in the above-captioned case.

On July 18, 1997, the United States filed a complaint to enjoin and

restrain the defendants from violating Section 1 of the Sherman Act, 15

U.S.C. 1, as amended. The complaint alleges that the defendants and

others conspired to exchange current and prospective brokerage

commission information with the purpose and effect of lowering

brokerage commissions paid to brokers in the United States for

arranging certain types of transactions, namely the purchase and sale

of Brent spread contracts and contracts for differences (``CFDs''),

involving Brent blend crude oil, a crude oil produced in the North Sea.

Specifically, the complaint alleges that, in furtherance of this

conspiracy, the defendants and others communicated with each other

concerning current and prospective brokerage commission information on

Brent spread contracts and CFDs and reduced such commissions. As a

result of the conspiracy, the brokerage commissions paid to brokers on

the purchase and sale of Brent spread contracts and CFDs were reduced.

If entered by the Court, the proposed Order will prohibit each

defendant from agreeing with any other trader, unrelated to such

defendant, to (1) fix, lower, raise, stabilize or maintain any

brokerage commission for Brent spread contracts and CFDs or (2)

exchange any information for that purpose. The proposed Order will also

prohibit each defendant from requesting or advising any other trader,

unrelated to such defendant, to lower, raise or change any brokerage

commission for Brent spread contracts and CFDs.

If entered, the proposed Order will require each defendant firm to

designate an antitrust compliance officer to instruct traders and

company officials about the requirements of the proposed Order.

Public comment is invited within the statutory 60-day period. Such

comments will be published in the Federal

[[Page 41415]]

Register and filed with the Court. Comments should be addressed to

Ralph T. Giordano, Chief, New York Office, U.S. Department of Justice,

Antitrust Division, 26 Federal Plaza, Room 3630, New York, New York

10278 (telephone: (212) 264-0390).

Rebecca P. Dick,

Deputy Director of Operations, Antitrust Division.

United States District Court for the Southern District of New York

United States of America, Plaintiff, v. AIG Trading Corporation;

BP Exploration & Oil Inc.; and Cargill International, S.A.

Defendants.

Stipulation and Order

Whereas, plaintiff, United States of America, having filed its

complaint on July 18, 1997, and plaintiff and AIG Trading Corporation,

BP Exploration & Oil, Inc. and Cargill International, S.A.

(``defendants''), by their respective attorneys, having agreed to the

entry of this stipulation and order without trial or adjudication of

any issue of fact or law herein and without this stipulation and order

constituting any evidence against or an admission by any party with

respect to any such issue;

Now, Therefore, before the taking of any testimony and without

trial or adjudication of any issue of fact or law herein,

Plaintiff and defendants hereby agree as follows:

I Jurisdiction and Venue

This Court has jurisdiction over the subject matter of this action

and over each of the parties consenting hereto. Venue is proper in the

Southern District of New York.

II Definitions

As used in this stipulation and order:

A. Brent contract means a commercial transaction (i) calling for

the delivery FOB at Sullom Voe, United Kingdom, of Brent blend crude

oil, a crude oil produced in the North Sea, in cargo lots of 500,000

barrels (plus or minus a 5% operational tolerance at the buyer's

option) on an unspecified day in a given month forward; (ii) where the

seller is obligated to give notice, by 1700 hours London time, not less

than fifteen (15) days prior to the first loading day, of a three day

loading range within which the buyer must take delivery; (iii) at a

price fixed at the time of that contract; (iv) with payment within

thirty (30) days of the bill of lading date; and (v) the contract is

governed by English law, with jurisdiction over disputes in the English

courts, or should any of these terms be changed or amended, any

successor contract for a future purchase of Brent blend crude oil.

B. Brent spread contract means a commercial transaction in which

there is simultaneous: (i) Purchase of a Brent contract for a given

month forward; and (ii) sale of a Brent contract for a different month

forward.

C. CFD means a commercial transaction involving the purchase of an

instrument (a ``Contract for Differences'') the price of which is

determined by the difference between: (i) The published price of a

cargo of Brent blend crude oil already loaded or available to be loaded

on a specified day (``dated Brent'') and, (ii) the published price of a

cargo of Brent blend crude oil available to be loaded on an unspecified

day of the first month forward. The ``published prices'' referred to

are those reported presently in Platt's Oilgram Price Report.

D. Broker means any person, other than a trader, who is regularly

engaged in the business of providing, for remuneration, the service of

locating buyers for prospective sellers, or sellers for prospective

buyers, of Brent spread contracts or CFDs.

E. Brokerage commission means the amount of remuneration paid to a

broker for arranging the purchase and sale of Brent spread contracts or

CFDs by other persons.

F. Person means any individual, corporation, partnership, company,

sole proprietorship, firm or other legal entity.

G. Trader means any person who, in the ordinary course of its

business, purchases or sells Brent spread contracts or CFDs.

H. Any means one or more.

I. Or means and/or.

III Applicability

This stipulation and order applies to each defendant; to each of

its executive officers, directors, successors and assigns, during the

respective periods that they serve as such; and to any agents and

employees assigned to purchase or sell any Brent spread contracts or

CFDs or assigned to supervise the purchases and sale of such contracts.

IV Prohibited Conduct

Each defendant shall not, directly or indirectly:

(A) Agree with any other trader unrelated to such defendant to (1)

fix, lower, raise, stabilize or maintain any brokerage commission for

Brent spread contracts and CFDs or (2) exchange any information for

that purpose; and

(B) Request or advise any other trader unrelated to such defendant

to lower, raise or change any brokerage commission for Brent spread

contracts and CFDs to be paid by it.

V Limiting Conditions

A. Notwithstanding the provisions of Section IV, any defendant

shall be entitled to:

(1) Engage in any communication or other contract with any trader

when such action is taken: (a) To propose, negotiate, agree to, modify,

execute or cancel a purchase of sale of a Brent spread contract and CFD

with such trader as counter party or co-venturer; or (b) to allocate

between the defendant and such trader responsibility for payment or

negotiation of brokerage commissions relating to such purchase or sale.

(2) Engage in any communication or other contact with a broker when

such action is taken: (a) To propose, negotiate, agree to, modify,

execute or cancel a purchase or a sale of a Brent spread contract(s) or

CFD(s) concerning which such broker may or will receive a brokerage

commission; or (b) propose, negotiate, agree to, or modify a brokerage

commission or commissions.

(3) Engage in any activity concerning the payment of a brokerage

commission that is required or authorized by the constitution, bylaws,

rules, regulations, resolutions or laws governing any market, whether

now existing or hereafter established, which is or may become subject

to the jurisdiction of either: (a) The Commodity Futures Trading

Commission; or (b) any government agency or self regulatory

organization whose responsibilities, pursuant to the laws of the United

States of America, include authority with respect to the purchase and

sale of Brent contracts, Brent spread contracts, or CFDs.

(4) Engage in any activity concerning the payment of a brokerage

commission to any broker located in a foreign country that is required

or authorized by the constitution, bylaws, rules, regulations,

resolutions or laws governing any market, whether now existing or

heretofore established, subject to the jurisdiction of either: (a) The

International Petroleum Exchange or (b) any government agency or self

regulatory organization whose responsibilities, pursuant to the laws of

any foreign country, include authority with respect to the purchase or

sale of Brent contracts, Brent spread contracts, or CFDs.

(5) Engage in any activity concerning the payment of a brokerage

commission to any broker located in the United States that is required

or authorized by the constitution, bylaws, rules,

[[Page 41416]]

regulations or laws governing any market, whether now or hereafter

established, subject to the jurisdiction of either (a) the

International Petroleum Exchange or (b) any government agency or self-

regulatory organization whose responsibilities pursuant to the laws of

any foreign country include authority with respect to the purchase or

sale of Brent contracts, Brent spread contracts or CFDs, provided that,

if the activity is otherwise prohibited by Section IV, the plaintiff

has not objected to such proposed activity within sixty (60) days

following written notice to the New York Office of the Antitrust

Division of the United States Department of Justice by a defendant of

an intention to engage in such activity.

B. Nothing in this stipulation and order shall prohibit defendants

from engaging in any activity lawful under the Foreign Trade Antitrust

Improvements Act, 15 U.S.C. Sec. 6a.

C. No finding of any violation of this stipulation and order may be

made based solely on parallel conduct.

VI Compliance Program

In order to ensure compliance with the provisions of Section IV of

the stipulation and order:

(A) Each defendant shall maintain an antitrust compliance program

which shall include designating, within sixty (60) days of entry of

this stipulation and order, an Antitrust Compliance Officer with

responsibility for implementing the antitrust compliance program and

achieving full compliance with this stipulation and order. The

Antitrust Compliance Officer shall, on a continuing basis, supervise

the review of the current and proposed activities of his or her

defendant company to ensure that it complies with this stipulation and

order.

(B) The Antitrust Compliance Officer shall, on a continuing basis,

be responsible for the following:

(1) Distributing, within thirty (30) days from the effective date

hereof, a copy of this stipulation and order to each of the officers

and employees of the defendant whose duties or responsibilities include

determining, changing, proposing, approving, disapproving or

implementing any brokerage commission.

(2) Distributing in a timely manner a copy of this stipulation and

order to any officer or employee who succeeds to a position described

in Section VI(B)(1).

(3) Briefing annually those persons who shall then have the duties

identified in Section VI(B)(1) or (2) on the meaning and requirements

of this stipulation and order and of the antitrust laws, and advising

them that the defendant's legal advisors are available to confer with

them regarding compliance with both the stipulation and order and the

antitrust laws.

(4) Obtaining from each person who shall then have the duties

identified in Section VI (1) or (2), an annual written certification

that he or she: (i) Has read, understands, and agrees to abide by the

terms of this stipulation and order; (ii) is not aware of any violation

of this stipulation and order that has not been reported to the

Antitrust Compliance Officer; and (iii) has been advised and

understands that his or her failure to comply with this stipulation and

order may result in an enforcement action for civil or criminal

contempt of court against the defendant or any other person who

violates this stipulation and order.

(5) Maintaining (i) a record of all certifications received

pursuant to Section VI(B)(4); (ii) a file of all documents in existence

at the commencement of and related to any investigation by the

Antitrust Compliance Officer of any alleged violation of this

stipulation and order; and (iii) a record of all non-privileged

communications generated after the commencement of any such

investigation and related to any such alleged violation, which shall

identify the date and place of the communication, the persons involved,

the subject matter of the communication, and the results of any related

investigation.

(C) If a defendant's Antitrust Compliance Officer learns of any

violations of any of the terms and conditions contained in this

stipulation and order that defendant shall immediately take appropriate

action to terminate or modify the activity so as to comply with this

stipulation and order.

VII Certification

A. Within seventy-five (75) days after the entry of this

stipulation and order, each defendant shall certify to the plaintiff

whether it has designated an Antitrust Compliance Officer and has

distributed the stipulation and order in accordance with Section VI(B)

above.

B. For five (5) years after the entry of this stipulation and

order, on or before its anniversary date, each defendant shall file

with the plaintiff an annual statement as to the fact and manner of its

compliance with the provisions of Section VI.

VIII Plaintiff Access

A. For the sole purpose of determining or securing compliance with

this stipulation and order, and subject to any legally recognized

privilege or work product protection, from time to time duly authorized

representatives of the Department of Justice shall, upon written

request of the Attorney General or of the Assistant Attorney General in

charge of the Antitrust Division, and on reasonable notice to any

defendant at its principal office, be permitted:

(1) Access during office hours of such defendant, which may have

counsel present, to inspect and copy (or to require the defendants to

produce copies of) all records, documents, and tape recordings in the

possession or under the control of such defendant, and which relate to

compliance with this stipulation and order; and

(2) Subject to the reasonable convenience of such defendant and

without restraint or interference from the defendant, to interview

officers, employees, or agents of such defendant, each of whom may have

counsel present, regarding compliance with this stipulation and order.

B. Upon the written request of the Attorney General or the

Assistant Attorney General in charge of the Antitrust Division made to

any defendant, such defendant shall prepare and submit such written

reports, under oath if requested, relating to defendant's compliance

with this stipulation and order as may be requested.

C. No information, tape recordings, or documents obtained by the

means provided in Sections VI, VII, and VIII shall be divulged by

plaintiff to any person other than a duly authorized representative of

the Executive Branch of the United States, except in the course of

legal proceedings to which the United States is a party, or for the

purpose of securing compliance with this stipulation and order, or as

otherwise required by law.

D. If at the time information, tape recordings, or documents are

furnished by any defendant to plaintiff, such defendant represents and

identifies in writing the material in any such information or documents

to which a claim of protection may be asserted under Rule 26(c)(7) of

the Federal Rules of Civil Procedure and said defendant marks each page

of such material, ``Subject to Claims of Protection under Rule 26(c)(7)

of the Federal Rules of Civil Procedure,'' then plaintiff shall give

ten (10) business days notice to such defendant at its Office of

General Counsel prior to divulging such material in any legal

proceeding (other than a grand jury proceeding) to which that defendant

is not a party.

[[Page 41417]]

IX Rescission by Plaintiff

The parties agree that the Court may enter this stipulation and

order, upon motion of any party or upon the Court's own motion, at any

time after compliance with the requirements of the Antitrust Procedures

and Penalties Act, 15 U.S.C. Sec. 16, and without further notice to any

party or other proceedings, provided that the plaintiff has not

notified the parties and the Court that it wishes to rescind its

agreement to entry of the stipulation and order. Plaintiff may rescind

its agreement to entry of the stipulation and order at any time before

entry of the stipulation and order by the Court by serving notice

thereof on the defendants and by filing that notice with the Court. In

the event plaintiff rescinds its agreement to entry of the stipulation

and order, the stipulation and order shall be of no effect whatever,

and the agreement among the parties shall be without prejudice to any

party in this or any other proceeding.

X Jurisdiction Retained

Jurisdiction shall be retained by the Court to enable any of the

parties to this stipulation and order to apply at any time for such

further orders and directions as may be necessary or appropriate for

the construction or implementation of this stipulation and order, for

the enforcement or modification of any of its provisions, or for

punishment by contempt.

XI Expiration of Stipulation and Order

This stipulation and order shall expire ten (10) years from its

date of entry by the Court.

For Plaintiff United States of America:

Joel I. Klein (JK-3481),

Acting Assistant Attorney General.

A. Douglas Melamed (AM-4601),

Principal Deputy Assistant Attorney General.

Rebecca P. Dick (RD-5481),

Deputy Director of Operations.

Ralph T. Giordano (RG-0114),

Chief, New York Office.

Philip F. Cody (PC-3521)

John J. Greene (JG-8281)

Edward Friedman (EF-0245)

John W. McReynolds (JM-0441)

Attorneys, U.S. Department of Justice, Antitrust Division, 26 Federal

Plaza, Room 3630, New York, New York 10278, (212) 264-0390.

For Defendants.

Paul, Weiss, Rifkind, Wharton & Garrison,

Daniel J. Beller (DB-7312),

1285 Avenue of the Americas, New York, New York 10019-6064, Tel: (212)

373-3000.

Attorneys for AIG Trading Corporation,

Sullivan & Cromwell,

Garrard R. Beeney (GB-1345),

125 Broad Street, New York, New York 10004-2498, Tel: (212) 558-4000,

Attorneys for BP Exploration & Oil Inc.

Howrey & Simon

Margaret H. Fitzsimmons (MF-3327)

1299 Pennsylvania Avenue, N.W., Washington, D.C. 20004, Tel: (202) 783-

0800,

Attorneys for Cargill International, S.A.

Order of the Court

The Court having reviewed the Complaint and other filings by the

United States, having found that this Court has jurisdiction over the

parties to this stipulation and order, having heard and considered the

respective positions of the United States and the defendants [at a

hearing on __________] and having concluded that entry of this

stipulation and order is in the public interest, it is hereby Ordered:

That the parties comply with the terms of this stipulation and

order;

That the Complaint of the United States is dismissed with

prejudice;

That the Court retains jurisdiction to enable any of the parties to

this stipulation and order to apply to the Court at any time for such

further orders and directions as may be necessary or appropriate for

the construction or implementation of this stipulation and order, for

the enforcement or modification of any of its provisions, or for

punishment by contempt.

So ordered this ______ day of __________, 1997.

----------------------------------------------------------------------

United States District Court Judge.

United States District Court for the Southern District of New York

United States of America, Plaintiff, v. AIG Trading Corporation;

BP Exploration & Oil Inc.; and Cargill International, S.A.

Defendants.

Competitive Impact Statement

The United States of America, pursuant to Section 2 of the

Antitrust Procedures and Penalties Act (APPA), 15 U.S.C. Sec. 16(b),

submits this Competitive Impact Statement in connection with the

proposed Stipulation and Order submitted for entry with the consent of

defendants in this civil antitrust proceeding.

I Nature and Purpose of the Proceedings

On July 18, 1997 the United States filed a civil antitrust

complaint under Section 4 of the Sherman Act, as amended, 15 U.S.C.

Sec. 4, alleging that the defendants engaged in a combination and

conspiracy, in violation of Section 1 of the Sherman Act, 15 U.S.C. 1,

to exchange current and prospective brokerage commission information

with the purpose and effect of lowering commissions paid to brokers

located in the United States for arranging certain types of

transactions, namely the purchase and sale of Brent spread contracts

and contracts for differences (CFDs), involving Brent blend crude oil,

a crude oil produced in the North Sea. Specifically, the complaint

alleges that, in furtherance of this conspiracy, the defendants and

others:

(a) Communicated with each other regarding current and prospective

brokerage commissions; and

(b) Reduced brokerage commissions.

On July 18, 1997, the United States and the defendants also filed a

proposed Stipulation and Order (``proposed Order'') to resolve the

allegations in the complaint. The proposed Order will prevent each of

the defendants from agreeing with other traders to (1) fix, lower,

raise, stabilize or maintain any commission to be paid to a broker for

arranging the purchase and sale of Brent time spreads or CFDs or (2)

exchange any information for that purpose, and from requesting or

urging any other trader to lower, raise or change any such commission

to be paid by it.

The United States and the defendants have agreed that the Court may

enter the proposed Order after compliance with the APPA, unless the

United States withdraws its consent (Section IX of the proposed Order).

The proposed Order provides (as is standard in the Department's

settlements) that it shall not constitute evidence against or an

[[Page 41418]]

admission by any party with respect to any issue of fact or law.

Entry of the proposed Order will terminate this civil action as to

the defendants, except that the Court will retain jurisdiction for

further proceedings that may be required to enforce or modify the order

entered, or to punish violations of any of its provisions by contempt.

II Description of Practices Giving Rise to the Alleged Violation of the

Antitrust Laws

Each of the defendants acted as a trader of Brent spread contracts

and CFDs. Traders, including the defendants, regularly employed the

services of brokers in connection with the purchase and sale of Brent

spread contracts and CFDs. The brokerage commission paid by traders to

brokers in connection with such purchases and sales is usually

expressed in terms of an amount per barrel purchased and sold. In

connection with Brent spread contracts and CFDs, a broker was usually

paid a full brokerage commission by each party to the transaction.

Beginning at least as early as July 1992, representatives of the

defendants agreed with one another and other traders during various

telephone conversations and in person in Europe and the United States

to exchange current and prospective brokerage commission information on

commissions paid to brokers, including brokers located in the United

States, for arranging the purchase and sale of Brent spreads and CFDs.

The purpose of these exchanges was to facilitate a reduction in the

amount of commissions paid, and as a direct result of this agreement,

defendants and other traders were able to reduce such commissions in

July and August 1992.

III Explanation of the Proposed Stipulation and Order

Format. The settlement of this civil action is in the form of a

Stipulation and Order rather than a Final Judgment to ameliorate the

likelihood that the settlement of this action will trigger (1) the

institution of regulatory proceedings involving or (2) the imposition

of regulatory sanctions against defendant AIG Trading Corporation (AIG

Trading), its corporate parent and subsidiaries of the corporate parent

in connection with various regulated businesses unrelated to the

subject matter of this action.

Defendant AIG Trading is a subsidiary of AIG Trading Group Inc.

(Trading Group) which is a subsidiary of American International Group,

Inc. (AIG). AIG and it subsidiaries comprise a large, diversified

financial service organization operating in 130 countries and

jurisdictions. They are engaged in the businesses of insurance, money

management, financial risk management, mutual fund advisory services

and operation, and trading in the foreign exchange, interest rate,

precious and base metals and crude oil and natural gas markets. In

1994, AIG and its consolidated subsidiaries generated revenues of over

$22 billion.

Because of their involvement in the highly regulated insurance and

investment businesses, AIG and its subsidiaries are subject to

supervision and review by the state departments of insurance in all

fifty states, more than one hundred foreign insurance and bank

regulatory agencies, the Securities and Exchange Commission (SEC) and

securities regulators in the United States and various foreign

countries as well as by various self regulatory organizations, which

typically regulate both membership and the conduct of its members and

their affiliates.

During the period covered by the Complaint in this action, energy

trading represented about seven percent of Trading Group's profit and

the purchase and sale of Brent spread contracts and CFDs, the subject

matter of the Complaint, represented only a very small part of all

energy-related revenues and profits. In the case of the parent

corporation, AIG, the purchase and sale of Brent spread contracts and

CFDs by defendant AIG Trading generated only a minuscule portion of

total AIG revenues.

The entry of a Final Judgment against defendant AIG Trading in this

case could, and in some instances would, trigger further inquiry and

investigation by a host of regulatory entities, both in the United

States and abroad, to determine whether AIG and its subsidiaries will

be permitted to continue to engage in various regulated businesses as

they have done in the past, or whether sanctions are appropriate.

The triggering of such regulatory inquiries and investigations and

the imposition of any such sanctions in connection with their

businesses unrelated to the purchase and sale of Brent spread contracts

and CFDs, would be burdensome to AIG and its subsidiaries. In light of

the limited scope of the violation, this result is unwarranted.

In view of the practices of various regulatory authorities and the

provisions of certain applicable regulatory laws and rules, it is

believed that settlement of this action in the form of a stipulation

and order will likely expose AIG and its subsidiaries to fewer

regulatory inquiries, investigations and possible sanctions in

connection with businesses unrelated to the subject matter of this

action than would entry of a Final Judgment containing identical

relief. Accordingly, the proposed Order in settlement of this action is

in the form of a stipulation and order.

Section X of the proposed Order provides that its violation may be

punished by contempt.

Prohibited Conduct. The proposed Order will deter the recurrence of

conduct that violates Section 1 of the Sherman Act. Specifically,

Section IV of the proposed Order bars each of the defendants, unless

otherwise specifically permitted, in connection with the purchase and

sale of Brent spread contracts or CFDs, from:

(A) Agreeing with any other trader to (1) fix, lower, raise,

stabilize or maintain any brokerage commission or (2) exchange any

information for that purpose; and

(B) Requesting or urging any other trader to lower, raise or change

any brokerage commission to be paid by it.

Section V of the proposed Order contains certain limiting

provisions that clarify the scope of the prohibitions in Section IV.

Section V identifies specific activities that are not barred by the

proposed Order. Specifically, Section V (A) provides that each of the

defendants may (1) engage in contacts with any trader to (a) propose,

negotiate or cancel a purchase or sale of a Brent spread contract or

CFD with such trader as a counter party or co-venturer or (b) to

allocate between themselves the responsibility for payment or

negotiation of brokerage commissions relating to such a purchase or

sale; (2) engage in contracts with a broker in connection with the

purchase or sale of a Brent spread contact or CFD; (3) engage in

brokerage commission activity required or authorized by any markets

subject to the jurisdiction of either the Commodity Futures Trading

Commission or any governmental or self regulatory organization whose

responsibilities under United States law includes authority over the

purchase and sale of Brent contracts, Brent spread contracts or CFDs;

or (4) engage in activity concerning the payment of brokerage

commissions to any broker located in a foreign country that is required

or authorized by any market subject to the jurisdiction of either the

International Petroleum Exchange or any governmental or self regulatory

organization whose responsibilities under foreign law include authority

over the purchase or sale of Brent contracts, Brent spread contracts or

[[Page 41419]]

CFDs; and (5) engage in activity concerning the payment of brokerage

commissions to any broker located in the United States that is required

or authorized by either the International Petroleum Exchange or any

governmental or self regulatory organization whose responsibilities

under foreign law include authority over the purchase or sale of Brent

contracts, Brent spread contracts or CFDs, provided that, if the

activity is otherwise prohibited by Section IV of the Stipulation and

Order, the United States has not objected within sixty (60) days

written notice by a defendant of an intention to engage in such

activity.

Section V(B) provides that nothing in the Stipulation and Order

shall prohibit the defendants from engaging in activity lawful under

the Foreign Trade Antitrust Improvements Act, 15 U.S.C. Sec. 6a.

Section V(C) provides that no finding of any violation of the

proposed Order may be made based solely on parallel conduct.

Sections VI and VII require each defendant to maintain an antitrust

compliance program to assure compliance with the proposed Order and

with the federal antitrust laws. Under the compliance program, an

antitrust compliance officer, to be appointed by each defendant is

required to distribute copies of the proposed Order to each of its

officers and employees with duties or responsibilities that include

determining, changing, proposing, approving disapproving or

implementing any brokerage commission paid to a broker for arranging

the purchase or sale of Brent spread contracts or CFDs; to brief such

personnel annually on the meaning and requirements of both the

antitrust laws and the proposed Order; and to obtain from such

personnel certifications that they have read and agree to abide by the

terms of the proposed Order, and that they have been advised and

understand that a violation of the proposed Order by them may result in

their being found in civil or criminal contempt of court.

In addition, the proposed Order provides a method for determining

and securing the defendants' compliance with its terms. Section VIII

provides that, upon the request of the Department of Justice, a

defendant shall submit written reports, under oath, relating to the

defendant's compliance with the proposed Order. The Department of

Justice also is permitted to inspect and copy all books and records,

and to interview officers, employees and agents of the defendants.

Section XI makes the proposed Order effective for ten years from

the date of its entry.

The proposed order contains a proposed finding that entry of the

proposed Order is in the public interest. Under the provisions of the

APPA, entry of the proposed Order is conditional upon a determination

by the Court that the proposed Order is in the public interest.

The United States believes that the proposed Order is fully

adequate to prevent the recurrence of the violation of Section 1 of the

Sherman Act alleged in the Complaint, and that the disposition of this

proceeding without further litigation is appropriate and in the public

interest.

IV Remedies Available to Potential Private Litigants

Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any

person who has been injured as a result of conduct prohibited by the

antitrust laws may bring suit in federal court to recover three times

the damages suffered, as well as costs and reasonable attorneys' fees.

Entry of the proposed Order will neither impair nor assist the bringing

of such actions. Under the provisions of Section 5(a) of the Clayton

Act, 15 U.S.C. 16(a), the proposed Order has no prima facie effect in

any subsequent lawsuits that may be brought against the defendants in

this case.

V Procedures Available for Modification of the Proposed Order

As provided by the APPA, any person believing that the proposed

Order should be modified may submit written comments to Ralph T.

Giordano, Chief, New York Office, U.S. Department of Justice, Antitrust

Division, 26 Federal Plaza, Room 3630, New York, New York 10278, within

the sixty (60) days period provided in the Act. These comments, and the

Department's responses will be filed with the Court and published in

the Federal Register. All comments will be given due consideration by

the Department, which remains free to rescind its agreement to entry of

the proposed Order at any time prior to actual entry by the Court. The

proposed Order provides that the Court retains jurisdiction over this

action, and the parties may apply to the Court for any order necessary

or appropriate for modification, interpretation, or enforcement of the

Order, or for punishment of any violation thereof by contempt.

VI Alternative Forms of Relief Considered

The only alternative to the proposed Order considered by the United

States was a full trial on the merits and on relief. Such litigation

would involve substantial cost to the United States and is not

warranted because the proposed Order provides appropriate relief

against the violations alleged in the Complaint.

VII Determinative Materials and Documents

No materials or documents of the type described in Section 2(b) of

the APPA, 15 U.S.C. 16(b), were considered by the United States in

formulating the proposed Order. However, a letter, dated June 20, 1997,

from plaintiff's counsel to counsel for defendant Cargill

International, S.A. acknowledging Cargill International's right under

current law to seek relief from the compliance provisions of Section

VIII in the event it believes a conflict has arisen between any request

for information or documents under those provisions and foreign law,

was considered determinative by Cargill International in agreeing to

the proposed Order and is attached hereto as Exhibit A.

Dated: July 18, 1997.

Respectfully submitted,

Philip F. Cody,

John J. Greene,

Edward Friedman,

John W. McReynolds,

Attorneys, Antitrust Division, United States Department of Justice, 26

Federal Plaza, Room 3630, New York, New York 10278, (212) 264-0395.

July 14, 1997.

Margaret H. Fitzsimmons, Esq. Howrey & Simon,

1299 Pennsylvania Ave. NW., Washington, DC 20004-2402.

Re: Cargill International, S.A.

Dear Ms. Fitzsimmons: During our negotiations of a civil

settlement in this case, you suggested the possibility that a

conflict could arise between the plaintiff access provisions in

Section VIII of the proposed stipulation and order, which authorizes

the Assistant Attorney General to inspect documents or conduct

interviews and to request written reports, and the law or orders of

foreign governments, which may appear to prohibit compliance with

such provisions. Of course, we would attempt to work with Cargill

International, S.A. to avoid any such conflict in exercising our

rights under Section VIII. In the event we could not reach

agreement, Cargill International would be free to seek relief from

the U.S. order court from its obligations to comply with any Section

VIII request.

[[Page 41420]]

Sincerely yours,

Philip F. Cody,

Assistant Chief.

[FR Doc. 97-20209 Filed 7-31-97; 8:45 am]

BILLING CODE 4410-11-M