For years, American cotton farmers suspected that they were getting cheated by powerful companies that bought and sold their goods to overseas buyers.
When a whistle-blower came forward who appeared to validate those suspicions in 2021, the Commodity Futures Trading Commission, a federal regulatory agency, began an investigation.
During the last months of the Biden administration, the agency reached a settlement against one of the trading companies, Olam Group. The firm agreed to pay a $3.25 million fine after the C.F.T.C. found it had misled the markets about its cotton exports to China.
By that point, that same whistle-blower had accused Louis Dreyfus Company of doing the same thing.
But just as lawyers for the C.F.T.C. were on the verge of recommending civil charges against Louis Dreyfus, the Trump administration took over. The agency’s newly appointed acting chairwoman shut down the investigation, questioning whether the evidence was adequate, according to more than half a dozen people familiar with the inquiry who described internal matters on the condition of anonymity.
The handling of the Louis Dreyfus matter came in the midst of an enormous rollback in enforcement at the C.F.T.C., a small but important agency that oversees the nation’s multi-trillion-dollar commodities markets.
It also reflects a roller-coaster approach from one administration to the next, with seemingly similar cases handled differently depending on who is in charge, which critics say raise concerns about fairness and selective enforcement.
Since Mr. Trump returned to office, the C.F.T.C. has intervened to help the cryptocurrency industry, the source of at least $1.4 billion in revenue for the president in 2025. It has fast-tracked regulatory approvals for and snuffed out investigations of prediction market companies, including at least one in which Donald Trump Jr., the president’s oldest son, is deeply invested.
But the retrenchment has not stopped there.
Enforcement in general has slowed to a crawl, first under Caroline D. Pham, who served as acting chairwoman, and extending under Michael S. Selig, who was sworn in as chairman in December. While Mr. Selig promised vigorous oversight, he hired a new enforcement chief partly, he said, because of that lawyer’s track record in protecting companies from “overzealous regulators.”
Under Mr. Trump, the agency has filed an average of one new complaint a month for any violation. That is one-fifth as many as during the Biden administration, when the C.F.T.C. went after major trading houses and financial institutions as well as individual fraudsters.
Financial penalties imposed by the agency to settle new cases are also way down: amounting to $11 million so far this year, compared to more than $380 million at this point in 2024.
Rick Glaser, who retired in June 2025 as a deputy director in the enforcement division, said the agency’s longtime commitment to enforcement “seems to have vanished.”
Even given a shrunken staff from Trump administration cuts, he said, the drop in cases “is shocking and suggests that the C.F.T.C. is no longer the cop on the beat.”
Brooke Nethercott, the agency’s spokeswoman, said the Biden administration fined industries billions of dollars for minor, administrative offenses. “Chairman Selig’s C.F.T.C. is focused on preventing and policing insider trading, fraud, manipulation and other abuses in our markets while ensuring innovation thrives in America,” she said.
In its biggest case so far, announced Friday, the agency alleged that fraudsters pretending to trade foreign currency stole more than $400 million from customers.
To advocates for the farmers, the accusations against Louis Dreyfus were far from trivial.
“The cotton industry is watching these high-profile cases with great scrutiny,” Dale Cougot, a cotton industry expert from Texas, wrote in a letter copied to the agency late last year. “If they are dismissed or inadequately addressed, it will send a clear signal that enforcement is optional.”
Louis Dreyfus did not respond to repeated requests for comment. Nor did Ms. Pham, who shelved the investigation.
A person familiar with her stance, who described a confidential inquiry on the condition of anonymity, said Ms. Pham opposed both filing charges against Louis Dreyfus and the settlement against Olam Group because she did not believe the agency had met the burden of proof.
While Ms. Pham intervened repeatedly on the side of crypto and prediction market companies, she also objected to charging companies with what she considered possible “paperwork errors,” as she said when she criticized the fine against the Olam Group.
Still, lawyers in the enforcement division had hopes that the Louis Dreyfus inquiry would survive her tenure or be rekindled by Mr. Selig. Like Olam, Louis Dreyfus was one of the biggest commercial traders of American cotton. And the purported victims, American farmers, are an important political constituency for the president and the Republican Party.
Mr. Trump proclaims that he loves farmers while Democrats hate them. “Ranchers and farmers have always been a No. 1 priority to me,” he declared earlier this month. “Based on the results of the election, they like me a lot, and I like them a lot.”
The tipster had told officials that Olam Group and Louis Dreyfus were deliberately hiding their export deals to keep their costs down, according to five people familiar with the inquiry.
He said that the companies would agree in advance to sell bales of cotton to Chinese buyers, then in turn acquire the cotton from American farmers.
By law, the companies must report their sales contracts to the Agriculture Department, which publishes weekly reports on supply and demand that farmers rely on to price their goods and make other decisions. But if the traders delay in reporting their export contracts — as the whistle-blower said was the case with the two firms — it gives a false impression of actual demand and the farmers set their prices lower, making less money.
On a major cotton deal, a difference of a few pennies per pound can mean millions of dollars of loss to the farmers.
“Farmers need this information,” said Seth Meyer, who resigned last December as chief economist for the Agriculture Department. “Otherwise they are at a distinct disadvantage to the major trading houses.”
O.A. Cleveland, a professor emeritus at Mississippi State University and a national cotton expert, said he had told major cotton traders in industry meetings: “You are trying to hide this information that should be public so you can rip off the growers.”
“If they get their hands slapped by the C.F.T.C.,” he said in an interview, “it tends to keep them in line.”
In fining the Olam Group $3.25 million in September 2024, the agency said that the firm had deliberately delayed reporting export sales of about 375,000 bales of cotton worth more than $190 million. The Olam Group did not admit guilt in the settlement.
By then, the Louis Dreyfus inquiry had been underway for about 20 months. With the help of an Agriculture Department economist, C.F.T.C. lawyers and an investigator tracked months of exports from Louis Dreyfus, which is based in the Netherlands.
They found sales recorded in internal company documents that were not reflected in the firm’s government reports, according to several people familiar with the case who described internal agency matters on the condition of anonymity.
The officials interviewed leaders of the cotton collectives that find buyers for farmers’ crops who claimed Louis Dreyfus had been falsely reporting its export sales for years, those people said. The recent deal with Olam was a positive sign, in their view, because it indicated the agency was serious about the violations.
But by April 2025, before the company had been notified of the possibility of charges and could respond to the allegations, Ms. Pham shut down the inquiry. Career officials wrote up a detailed pitch on why it should continue, to no avail. An effort within the enforcement division to revive the investigation late last year also failed.
In his September 2025 letter copied to the C.F.T.C., Mr. Cougot, the expert from Texas and a former economist at Olam, pleaded for enforcement of the rules.
The consequences of turning a blind eye, “will be borne not by multinational corporations,” he wrote, “but by the United States farmers, mills and communities who rely on a fair and lawful marketplace.”
Kitty Bennett contributed research.
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