Courtney applauds new CFTC rule making it easier to crack down on market manipulation

WASHINGTON, DC – Congressman Joe Courtney today applauded an announcement by the Commodity Futures Trading Commission (CFTC) that it is finalizing a rule to crack down on market manipulation. The rule would expand the CFTC's ability to prosecute manipulation, and, for the first time, it would allow the CFTC to prosecute fraud-based manipulation.

“As we have seen this year, the market is in dire need of reform,” said Congressman Courtney. “Today’s rule is a good first step in the implementation of the Dodd-Frank Wall Street Reform Act , and will strengthen consumer protections. Commodities markets affect every American family and business that purchase food and energy. Next up, the CFTC should impose new position limits and margin requirements that will reduce the hyper speculation that is driving prices – particularly oil prices – up needlessly.”

According to a 2008 report, the percentage of speculators in the commodities future markets has exploded – from 22.7 percent in 1998 to 68.7 percent in 2008. In the oil markets, speculation has increased from 15.9 percent to 57.4 percent in the same period. According to Goldman Sachs, speculation has contributed up to $27 to the price of a barrel of oil. Some analyses that speculation adds $1 to the cost of each gallon of gas.

Congressman Courtney has been a leading voice in Congress in calling for rules to limit the impact of speculators who buy and sell commodities without ever taking possession of oil. He has urged the CFTC to accelerate their rule-making process both with letters and in hearings of the House Agriculture Committee. He has also urged action in speeches in the House.