U.S. Is Probing Trades Before Mad Cow Report

U.S. prosecutors are investigating whether there were civil and criminal violations in cattle futures trading in the two weeks before the first U.S. case of mad cow disease was reported, a federal regulator said Thursday.

Futures prices plunged 20% in the days after the Dec. 23 announcement. Some ranchers believe that there were unusual trades before the announcement.

“That is something we are looking at. We are cooperating with the U.S. attorney’s office in the District of Columbia,” Commodity Futures Trading Commission Chairman James Newsome said at a Senate hearing. “We do hope to finish that investigation this summer.”

The CFTC launched the investigation to examine cattle futures trading patterns at the Chicago Mercantile Exchange to determine if any unusual activity occurred just before the Agriculture Department announced it found a case of the brain-wasting disease in a dairy cow in Washington state.

The agency previously said it was analyzing the trading of live cattle futures from Dec. 9 to 23. The Dec. 9 date is of interest because that is the day the infected cow in Mabton, Wash., was slaughtered, and on that day live cattle futures closed down the daily trading prime limit.