The Commodity Futures Trading Commission’s
(CFTC) enforcement position on market manipulation has been
weakened by two recent developments.
The first saw the CFTC suffer an in-court defeat to DRW
Trading, which it had originally sued in 2013 for entering
inflated bids in an interest rate swap futures market in order
to inflate the price.
The case was heard in a federal court where US District
Judge Richard Sullivan found that the company had acted in line
with market regulation. "It is not illegal to be smarter than
your counterparties in a swap transaction," read his
The second saw the CFTC settle terms with food giants
Mondelez International and Kraft Heinz just a few months later
for allegedly taking part in wash sales and manipulating the
price of red winter wheat futures in 2011.
Although this was settled out of court, sources believe the
Commission’s reluctance to advance the...