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Levin hits back at CFTC lawsuit

Tuesday 6 December 2011 - by Andrew.Hickley@gfsnews.com

 Influential US senator Carl Levin has hit out after two industry bodies filed a lawsuit against the SEC in a bid to block rules establishing position limits in commodities markets.

Levin says that new position limits rules must be kept in place to protect families and businesses from being "whipsawed" by speculation in energy and food markets.

Filed by the International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association on Friday, the lawsuit challenges final CFTC rules that limit the positions that investors can take in certain commodity markets.

The industry associations argue that the measure, which was passed by the CFTC in a 3-2 vote in October, was not included in the Dodd Frank Act.

The groups also accuse the CFTC of failing to conduct a "meaningful" cost-benefit analysis and of engaging in a flawed rulemaking process that prevented commentators from "meaningfully participating".

But Levin has hit back at this stance, arguing: "The financial industry tried to water down Dodd Frank before it was enacted, has been trying to chip away at it since it became law, and is continuing that effort with this lawsuit," he said in a statement released last week.


"The lawsuit claims Dodd Frank didn't require position limits, but those of us in the Senate who fought for the law know position limits were made mandatory and are vital to curb excessive speculation and price manipulation in commodity markets.

"This lawsuit will hopefully not be allowed by a court to delay legal protections needed to stop American families and businesses from being whipsawed by excessive speculation in energy and food prices," he added.

Send us your thoughts (in strict confidence) or submit an article in response:
Email: andrew.hickley@gfsnews.com


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