Judge throws out CFTC's position limits rule

WASHINGTON Fri Sep 28, 2012 3:42pm EDT

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WASHINGTON (Reuters) - A U.S. judge handed an 11th-hour victory to Wall Street's biggest commodity traders on Friday, knocking back tough new regulations that would have cracked down on speculation in energy, grain and metal markets.

Judge Robert Wilkins of the U.S. District Court for the District of Columbia threw out the U.S. Commodity Futures Trading Commission's new position limits rule, and sent the regulation back to the agency for further consideration.

Wilkins ruled that, by law, the CFTC was required to prove that the position limits in commodity markets are necessary to diminish or prevent excessive speculation.

He also ruled that the amendments to the 2010 Dodd-Frank financial oversight law "do not constitute a clear and unambiguous mandate to set position limits, as the Commission argues."

The ruling is a major victory to traders just two weeks before parts of the new position limits rule were scheduled to go into effect.

The Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association brought the suit against the CFTC, arguing that the regulations would force their members to drastically alter their businesses, cost them tens of millions of dollars, and send customers fleeing.

Wall Street has also long argued that regulators have not proven that position limits would curb speculation in markets and prevent disruptive price spikes.

The CFTC and industry groups that brought the suit did not immediately have comment.

The agency passed the position limit rule last year, in a bid to limit the number of contracts traders can hold in 28-commodities, including oil, coffee and gold. (Reporting By Alexandra Alper and Karey Wutkowski; Editing by James Dalgleish)

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Comments (4)
ch25061 wrote:
Is Reuters actually going to allow comments that express
Righteous Rage against this ruling which is patently ridiculous
And a travesty of justice. If I don’t see this comment
Published I will know you serve the beastly.

Sep 28, 2012 11:35pm EDT  --  Report as abuse
daddywarbucks wrote:
Excerpts from Silver Doctor:
*Breaking* Judge Throws Out CFTC’s Position Limits Rule
September 28, 2012 By The Doc 33 Comments
For anyone who wondered, the banksters are above the law- just ask Mr. Dimon and his Presidential cufflinks.

DC District Court Judge Robert Wilkins this afternoon threw out the CFTC’s position limits rule, scheduled to go into effect Oct 12th.

The metals manipulation will only end when FREE MARKET FORCES OVERWHELM the bullion banksters.


For those holding out the faintest of hopes in the system, we have reached out to the CFTC’s Bart Chilton for his comments, as well as whether the CFTC will appeal Judge Wilkins’ decision.

Check out these similar articles:

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-Blythe’s Boys File Suit Against the CFTC Over Position Limits
-CFTC Pushes Back Position Limits Meeting from Oct 4th to Oct 18th
-Senator Bernie Sanders to the CFTC: Exemptions to Position Limits Are Unacceptable
-CFTC Fines JP Morgan $600,000 for Violating Cotton Futures Speculative Position Limits

Sep 29, 2012 7:08am EDT  --  Report as abuse
Calum_Coburn wrote:
Who corrupted Judge Robert Wilkins? Did Wilkins sell out when President Barry Soetoro appointed him? Or was Wilkins bought out before when he worked for the Venable law firm?
Silver is the JP Morgue’s Achilles Heel, so lets keep up the pressure by taking physical off the market and alerting all we love and care for. $50 by year end. Peace & Love

Sep 29, 2012 9:33pm EDT  --  Report as abuse
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