An Illinois federal judge on Monday declined to dismiss a lawsuit against Kraft Heinz and Mondelez stemming from alleged manipulation of wheat prices.
Reuters reports that U.S. District Judge Edmond Chang allowed the lawsuit from wheat futures and options traders to continue. They allege that Kraft Foods -- prior to spinning off its snack brands into Mondelez and merging with Heinz -- violated the Sherman Antitrust Act and the Commodity Exchange Act in late 2011.
The traders' allegations mirrored a lawsuit filed against the companies last year by the U.S. Commodity Futures Trading Commission.
The CFTC alleged that Kraft’s $90 million purchase of wheat futures sought to artificially lower prices and resulted in a profit of $5.4 million.
Kraft and Mondelez claimed in court filings that they simply hoped to maintain Kraft's wheat supply in a "dysfunctional" market.
Mondelez expects to bear the majority of costs related to the CFTC lawsuit and said it does not expect any penalties to impact investors.
Chang dismissed additional claims in the traders’ lawsuit that the company conducted "wash trades" to create an illusion of greater market activity, but said that the plaintiffs could attempt to raise those issues again.
