July 8, 2011
By Gregory Meyer
The main US derivatives regulator has approved rules boosting the agency’s legal firepower against market manipulation after winning only one case at trial in its 36-year history.
The rules, adopted over the objections of hedge funds and the futures industry, will allow the Commodity Futures Trading Commission lawyers to cite recklessness as a reason to sue traders for manipulation. Previous rules required proof that traders had distorted prices.
The agency has also made it illegal to trade on privileged information obtained through fraud, deception or the breach of an executive’s duty. Until now, commodity markets had few constraints on insider trading.
Read the full article in the Financial Times.
Last Updated: July 8, 2011