Commodity regulator approves Cantwell tougher anti-manipulation rule

By:  Puget Sound Business Journal

The Commodity Futures Trading Commission (CFTC) voted today to approve a new rule that will make it easier for the CFTC to prosecute manipulation of commodity futures and derivatives market prices. The rule, to go into effect within 30 days, is based on legislation by Sen. Maria Cantwell, D-Wash., that was part of the 2010 Dodd-Frank Wall Street reform bill.

The new rule changes the burden of proof for the CFTC to prosecute abuses from “specific intent” to “reckless conduct,” a standard that is in line with that of the U.S. Securities and Exchange Commission (SEC), the Federal Energy Regulatory Commission (FERC) and the Federal Trade Commission (FTC).

“Commodity prices impact every aspect of our economy and consumers deserve to pay a fair price based on supply and demand,” Cantwell said in a statement. “This new anti-market manipulation rule creates a bright line which will deter bad actors from trying to get away with Enron-style behavior. Other federal regulators have used these same anti-market manipulation tools to stop and prosecute bad actors in other markets, and my hope is that the CFTC will do the same particularly in the oil futures market. These new rules of the road will enable the cops on the beat to prosecute market manipulators to the fullest extent of the law.”