Firm to Pay $158 Million in Copper Case

Sumitomo Corp. agreed to pay $158 million to settle U.S. and British charges that it manipulated copper prices in 1995-96, the company and the Commodity Futures Trading Commission said Monday.

The Japanese trading company agreed to pay U.S. fines of $125 million--in the largest CFTC penalty on record--and to set aside an additional $25 million in restitution to cover investor losses, the agency said.

In addition, the company said it is paying about $8 million to Britain’s Financial Services Authority to settle similar trading charges.

Sumitomo said it lost $2.6 billion as a result of unauthorized copper trading by then- chief trader Yasuo Hamanaka.

The company said it neither admits nor denies trading violations. The CFTC said it will not ban Sumitomo from U.S. futures markets, something the commission could have decided to do.

CFTC Chairwoman Brooksley Born said that although the CFTC investigation of Sumitomo is closed, the commission and British authorities continue to investigate other matters related to manipulation of the copper market, but she would not elaborate.

“We have made, and will continue to make, improvements in our internal control systems in order to achieve the highest international standards,” the company said in a statement.

Company officials declined to discuss details of how they cooperated with U.S. and British authorities.

The CFTC said it “makes no findings” on whether, as Sumitomo maintains, Hamanaka’s trading was “unauthorized and hidden from other company officials.”

In March, Hamanaka was sentenced to eight years in prison after pleading guilty to hiding his losses. He has appealed the sentence. Sumitomo has filed a civil lawsuit against him and his former boss in an attempt to recover some of its losses.