ADM: Employee Info Released in Error

Archer Daniels Midland Appeals May 3 Court Ruling in Ethanol Markets Case

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Archer Daniels Midland has appealed a federal court's decision to release information about a company employee at the center of an ongoing ethanol markets lawsuit. (Logo courtesy of Archer Daniels Midland)

LINCOLN, Neb. (DTN) -- Archer Daniels Midland alleges a federal court in Illinois erred when it released sealed company information as part of a May 3 ruling in an ethanol markets lawsuit.

The U.S. District Court for the District of Central Illinois granted the plaintiffs, AOT Holding AG, access to documents and other communications related to the 2019 suspension of an ADM accounting employee.

On Tuesday, attorneys for ADM asked the court to reconsider the ruling and to seal any company objections going forward. ADM said in its appeal the court's ruling was "clearly erroneous and contrary to law."

In particular, the court ordered ADM to provide information related to the suspension of employee Adam Kuffel to plaintiff AOT. Kuffel was suspended for allegedly violating the company's internal accounting policy.

AOT is one of several plaintiffs that have sued ADM, alleging the company manipulated ethanol prices, violating the Commodity Exchange Act. Specifically, AOT has alleged ADM suppressed the daily benchmark price of ethanol to benefit its short positions.

At an AOT deposition of Kuffel, he revealed he was suspended without pay by ADM in September 2019, according to the May 3 court order. Kuffel said during a deposition that a superior ordered him to violate the policy.

AOT filed its complaint just prior to the suspension, according to the order.

"Specifically, Kuffel improperly transferred short ethanol hedges from a 'mark-to-market' account to a 'slotted-futures' account," the order said.

"Kuffel testified that he was acting at the direction of either Rachel Hudson or Chris Cuddy, both of whom are Kuffel's superiors at ADM. Central to plaintiff's theory of the case are the actions of Ray Bradbury and Adam Kuffel (ADM employees)."

AOT has alleged Bradbury and Kuffel, as "senior members of ADM's ethanol group" worked to artificially lower the price of ethanol derivatives. Hudson passed away recently after working for 17 years at ADM.

In a motion to seal documents related to ADM's objection to the ruling, the company said its objection "quotes from and substantially paraphrases documents and testimony that contain information that the parties or non-parties have designated as either 'confidential' or 'highly confidential'" as directed by the court in a December 2019 protective order.

ADM attorneys argue the court's May 3 ruling released information that should have been sealed as part of the 2019 order.

"This court's order granting the motion, entered on the same day, publicly revealed some of ADM's materials that were designated and intended to be confidential," the company said in its objection.

"ADM respectfully requests that the court grant this motion to provisionally seal this objection while ADM discusses with plaintiffs and the court the extent to which the information in the parties' briefing on the objection should remain sealed."

AOT has alleged ADM's actions benefited the company by increasing the value of ADM's "short" or "hedged" ethanol positions. "Stated differently, plaintiff alleges that Bradbury and Kuffel artificially stunted ethanol prices to benefit ADM investments," the court said in its May 3 ruling.

The court sided with AOT on its claim that all documents and communications related to Kuffel's suspension are relevant to the overall case.

The court said AOT should have the opportunity to probe whether Kuffel's suspension was in any way connected to the alleged price-manipulation scheme.

AOT filed a class-action lawsuit in May 2020, alleging ADM manipulated the market at the Argo, Illinois, terminal by flooding the fuel terminal with lower-priced ethanol starting in November 2017 through March 2019.

The Argo terminal is the daily location for ethanol trading. The court said the specific trading in question occurred during the 30-minute "market-on-close," or MOC, window.

The trading window is considered crucial because the trading is used to set the daily Chicago benchmark price to determine the value of Chicago ethanol derivatives.

Similar lawsuits were filed by Wisconsin ethanol producers United Wisconsin Grain Producers, Didion Ethanol, Ace Ethanol, Fox River Valley Ethanol, Badger State Ethanol and Iowa producer Pine Lake Corn. In addition, a lawsuit filed by Green Plains Inc. in Nebraska was transferred to the Illinois court.

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Todd Neeley

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