Senate Passes Cantwell Anti-Manipulation Amendment

Measure added to financial reform bill gives federal regulators new powers to deter and fight market manipulation

WASHINGTON, DC – The U.S. Senate tonight unanimously passed strong anti-market manipulation legislation authored by U.S. Senator Maria Cantwell (D-WA) designed to strengthen enforcement powers over commodity and derivatives trading. Following her floor remarks, the Senate approved Cantwell’s amendment to the banking and financial reform legislation by voice vote.


“For years the Commodity Futures Trading Commission has lacked the tools necessary to deter and fight market manipulation,” Senator Cantwell said. “With the Senate passing this measure unanimously, I believe we are well on our way to restoring accountability in our financial markets. This amendment will draw a bright line that will deter bad actors and if manipulation does happen in the future, there will be a price to be paid.”


The legislation is based on Cantwell’s Derivatives Market Manipulation Prevention Act, which she introduced last year to prohibit the use of manipulative or deceptive devices or fraudulent information in swap and commodity markets.  Cantwell’s amendment gives the Commodity Futures Trading Commission (CFTC) a more effective legal tool to enforce prohibitions on market manipulation in futures and derivatives markets. Under current law, the standard the CFTC must meet to prove market manipulation is so high that there has only been one successful prosecution in the past 35 years.  The CFTC’s standard of proof is much higher than that used by other agencies such as the Securities and Exchange Commission (SEC), the Federal Energy Regulatory Commission (FERC) and the Federal Trade Commission (FTC) that oversee other financial and energy markets. Senator Cantwell’s legislation empowers the CFTC with the same anti-manipulation standard employed by the SEC for more than 75 years, which has been upheld and defined in many court cases, including the Supreme Court.  Cantwell was instrumental in granting the same authority and legal standard to FERC on electricity and natural gas markets in 2005, and to the FTC on oil markets in 2007. 


See below for more information on Senator Cantwell’s efforts to strengthen financial regulations, prevent market manipulation and forestall a recurrence of the financial collapse.


·         Cantwell-McCain Banking Integrity Act of 2009 (December 16, 2009)

·         Legislation subjecting derivatives traders to state gambling regulations (November 10, 2009)

·         Derivatives Market Manipulation Prevention Act of 2009 (September 17, 2009)