Market manipulation, excessive speculation and price fixing in commodities
Dr. Steve Suppan, 26 October 2020
On October 15, by a 3-to-2 vote, the Commodity Futures Trading Commission (CFTC) approved a woefully inadequate final rule to prevent market manipulation and excessive speculation in physical commodity derivatives contracts. The rulemaking process had begun in 2010, but a successful Wall Street lawsuit in 2012 concerning a few words in the Dodd Frank Wall Street Reform and Consumer Financial Protection Act of 2010, prevented its finalization while there was a Democratic majority of commissioners. This final rule is based on a May 15, 2020 proposal, following the majority’s vote to withdraw 2013 and 2016 proposals and supplements to proposals. IATP has commented on all the proposed rules, beginning in 2010 and up to the May proposal.
Commissioner Rostin Behnam noted in his dissent to the 899-page voting draft of the rule that the CFTC was still investigating an unprecedently large April 20-21 price swing in the West Texas Intermediate (WTI) crude oil contract. Why rush to finalize the rule before the completion of the WTI investigation? The majority needed to vote before Commissioner Brian Quintenz departs the CFTC at the end of October. Continue reading “Article: Market manipulation, excessive speculation and price fixing in commodities”
