CFTC History in the 2010s
January 14, 2010—The CFTC votes at an open meeting to publish in the Federal Register a proposal to set position limits for futures and option contracts in the major energy markets. (CFTC Press Release 5771-10, January 7, 2010).
March 25, 2010—The CFTC holds an open meeting to examine the trading of futures and options in the precious and base metals markets. (CFTC Press Release 5782-10, February 23, 2010).
April 3, 2010—The CFTC Launches a new web site along with supporting web 2.0 components. (CFTC Press Release 5804-10, April 3, 2010).
April 29, 2010—The CFTC issues an order filing and simultaneously settling (for a civil monetary penalty of $25 million among other things) charges that Moore Capital Management, LP, and various affiliated companies attempted to manipulate the settlement prices of platinum and palladium futures contracts on the New York Mercantile Exchange. (CFTC Press Release 5815-10, April 29, 2010). The CFTC settles similar charges with Moore trader Christopher L. Pia on July 25, 2011 (CFTC Press Release 6079-11, July 25, 2011).
May 6, 2010—Major stock indexes and stock index futures experience a brief but severe drop in prices, falling more than 5% in a matter of minutes, only to recover a short time later. Some individual securities experience more volatility than the stock indexes. (Statement by SEC and CFTC, May 6, 2010)
May 24, 2010—The newly formed Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues holds its first meeting. (CFTC Press Release 5823-10, May 17, 2010).
June 14, 2010—The CFTC approves the first futures contracts based on motion picture box office receipts after finding that the terms and conditions of Media Derivatives, Inc.’s proposed Weekend Motion Picture Revenue futures and options contracts do not violate the Commodity Exchange Act or CFTC regulations. However, the Dodd-Frank Act contains provisions that ban futures contracts based on motion picture box office receipts. (CFTC Press Release 5834-10, June 14, 2010).
July 21, 2010— President Obama signs the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). Title VII of the Dodd-Frank Act amends the Commodity Exchange Act to establish a comprehensive new regulatory framework for swaps and security-based swaps. The legislation is enacted to reduce risk, increase transparency, and promote market integrity within the financial system by, among other things: 1) providing for the registration and comprehensive regulation of swap dealers and major swap participants; 2) imposing clearing and trade execution requirements on standardized derivative products; 3) creating robust recordkeeping and real-time reporting regimes; and 4) enhancing the Commission’s rulemaking and enforcement authorities with respect to, among others, all registered entities and intermediaries subject to the Commission’s oversight. On the same day, the CFTC releases a list of 30 areas of rulemaking to implement the Dodd-Frank Act. (CFTC Press Releases 5855-10 and 5856-10, July 21, 2010).
August 16, 2010—The CFTC sanctions ConAgra Trade Group, Inc. (CTG) $12 Million for causing a non-bona fide price to be reported in the NYMEX Crude Oil futures contract. On January 2, 2008, CTG was the first to purchase NYMEX crude oil futures contracts at the then-historic price of $100. As a result of CTG’s effort to be the first to trade at the $100 level, CTG caused a non-bona fide price to be reported, according to the CFTC order. (CFTC Press Release 5873-10, August 16, 2010).
October 1, 2010—The CFTC holds the first of many open meetings to consider the issuance of proposed rules to implement the Dodd-Frank Act. (CFTC Press Release 5901-10, September 21, 2010)
October 1, 2010—The staffs of the CFTC and SEC release a joint report presenting their findings regarding the market events of May 6, 2010. (CFTC Press Release 5912-10, October 1, 2010)
May 24, 2011—The CFTC charges Parnon Energy Inc., Arcadia Petroleum Ltd. and Arcadia Energy (Suisse) SA, along with two traders, with price manipulation in the crude oil market. The complaint alleges cross-market trading scheme in 2008 involving accumulation and sell-off of a substantial position in physical crude oil to manipulate futures prices, yielding in excess of $50 million in unlawful profits for defendants. (CFTC Press Release 6041-11, May 24, 2011)
July 7, 2011—The CFTC holds the first of many open meetings to finalize rules to implement the Dodd-Frank Act, including new rules regarding the prohibition on manipulative trading and the definition of agricultural commodity. (CFTC Press Release 6064-11, June 30, 2011)
July 19, 2011—The CFTC files and simultaneously settles charges that Ecoval Dairy Trade, Inc. attempted to manipulate the daily settlement prices of non-fat dry milk cash-settled futures contracts on the Chicago Mercantile Exchange. The CFTC order requires Ecoval to pay a $1,425,000 civil monetary penalty. (CFTC Press Release 6075-11, July 19, 2011)
August 4, 2011—The CFTC holds an open meeting to, among other things, issue final rules regarding registration and core principles for swap data repositories, a new type of registered entity created by the Dodd-Frank Act. (CFTC Press Release 6085-11, July 28, 2011)
October 18, 2011—The CFTC holds an open meeting where it issues a final rule implementing position limits for futures and swaps in a variety of agricultural, metal, and energy commodities. (CFTC Press Release 6124-11, October 11, 2011)
October 31, 2011—MF Global, a futures commission merchant and broker-dealer, declares bankruptcy and reports deficiencies in customer futures segregated accounts held at the firm. The bankruptcy trustee later reports that up to $1.6 billion in customer funds were missing. (CFTC-SEC Statement on MF Global, October 31, 2011).
December 20, 2011—The CFTC holds an open meeting to, among other things, issue final rules on real-time reporting of swap transaction data and swap data recordkeeping and reporting requirements as part of the implementation of the Dodd-Frank Act. (CFTC Press Release 6157-11, December 13, 2011)
March 14, 2012—The CFTC charges Joseph F. Welsh III in federal court with attempted manipulation of the prices of palladium and platinum futures contracts, including the settlement prices. According to the complaint, while working as a broker at MF Global Inc., Welsh employed a manipulative scheme commonly known as “banging the close.” Welsh is also charged with aiding and abetting Christopher L. Pia, who had settled similar charges with the CFTC on July 25, 2011. (CFTC Press Release 6210-12, March 14, 2012)
April 18, 2012—The CFTC holds an open meeting to, among other things, issue a final rule (joint with the SEC) to further define the terms “Swap Dealer,” “Security-Based Swap Dealer,” “Major Swap Participant,” “Major Security-Based Swap Participant,” and “Eligible Contract Participant.” as part of the implementation of the Dodd-Frank Act. (CFTC Press Release 6228-12, April 11, 2012).
June 27, 2012—The CFTC orders Barclays Bank to pay a $200 million penalty for attempting to manipulate the LIBOR and Euribor benchmark interest rates and making related false reports to benefit its derivatives trading positions. The CFTC order also finds that Barclays made false LIBOR reports at the direction of members of senior management to protect its reputation during the global financial crisis of 2008. (CFTC Press Release 6289-12, June 27, 2012)
July 10, 2012—The CFTC holds an open meeting to, among other things, issue a final rule (joint with the SEC) to further define the terms “swap” and “security based swap” as part of the implementation of the Dodd-Frank Act. (CFTC Press Release 6295-12, July 3, 2012)
September 28, 2012—The U.S. district court for the District of Columbia vacates the CFTC’s rule implementing position limits for futures and swaps. On November 15, 2012, the CFTC appeals that ruling. (CFTC Press Release 6413-12, November 15, 2012)
November 28, 2012—The CFTC issues new rules to require certain credit default swaps and interest rate swaps to be cleared by derivatives clearing organizations (DCOs). The rules establish the first clearing determination by the Commission under the Dodd-Frank Act. Under the rules, market participants are required to submit a swap that is identified in the rule for clearing by a DCO as soon as technologically practicable and no later than the end of the day of execution. (CFTC Press Release 6429-12, November 28, 2012)
December 4, 2012—The CFTC files a complaint in federal court that Eric Moncada, BES Capital LLC, and Serdika LLC attempted to manipulate wheat futures prices, and engaged in fictitious sales and non-competitive transactions. According to the complaint, Moncada’s scheme was to electronically enter and immediately cancel numerous large-lot orders for wheat futures that he did not intend to fill, but that he intended to use to create a misleading impression of increasing liquidity in the marketplace. Moncada would then allegedly seek to take advantage of any price movements that may have resulted from this manipulative scheme by placing smaller orders, which he hoped to fill at prices beneficial to him, on the opposite side of market from his large-lot cancelled orders. (CFTC Press Release 6441-12, December 4, 2012)
December 19, 2012—The CFTC orders UBS, a Swiss bank, to pay a $700 million penalty to settle charges of manipulation, attempted manipulation and false reporting of LIBOR and other benchmark interest rates. In summary, the CFTC’s Order finds that for at least six years UBS regularly tried to manipulate (and at times successfully manipulated) multiple benchmark interest rates for profit, and that there were more than 2,000 instances of unlawful conduct involving dozens of UBS employees, including colluding with other panel banks, inducing interdealer brokers to spread false information and influence other banks; and the making of false LIBOR submissions to protect its reputation during the global financial crisis. (CFTC Press Release 6472-12, December 19, 2012)