Etheridge Praises CFTC's Moves To Place Restrictions On Speculative Trading In Agricultural, Energy & Other Markets

Press Release

U.S. Rep. Bob Etheridge (D-Lillington), the only N.C. member of the House Ways and Means Committee, lauded the U.S. Commodity Futures Trading Commission (CFTC) today, for its move to consider imposing limits on trading of energy futures by purely speculative investors. He also praised the CFTC for implementing tougher requirements to help identify the role hedge funds play in affecting contracts outside of regulated exchanges.

"The U.S. has been far too lenient, for far too long, on those who would use our commodities markets as personal playgrounds for financial manipulation," said Etheridge. "I have long advocated for an aggressive futures market regulator in order to maintain the effectiveness of markets for risk management and price discovery,"

Congressman Etheridge has long been concerned about the effect of market manipulation on energy prices. In 2008 he introduced legislation which would have required several of the changes that the CFTC proposed today. H.R. 6334, The Increasing Transparency and Accountability in Oil Prices Act, had similar disaggregation and reporting requirements to the CFTC proposal. H.R. 6604, The Commodity Markets Transparency and Accountability Act of 2008, bipartisan legislation introduced by House Agriculture Committee Chairman Collin Peterson and Etheridge which passed the House last year, contained additional provisions that the CFTC included in its proposals today

Congressman Etheridge's concerns about energy market manipulation are not limited to to the commodities exchanges. Shortly before the July 4, 2009, holiday, Rep. Etheridge sent a letter to Federal Trade Commission (FTC) Chairman Jon Leibowitz requesting the commission investigate complaints from North Carolinians about unusual price swings in the motor fuel market.

Etheridge believes:

The CFTC needs more resources to weed out potential manipulation and excessive speculation;
The U.S. should close the so-called "London-loophole" by giving the CFTC more authority over trading of U.S. energy commodities on overseas markets which are currently not regulated by a U.S. entity; and
More disclosure and transparency is needed from investors like index funds and swap dealers so the public can see, in the aggregate, how much these traders influence energy markets.

"The CFTC's proposals are not a cure-all, but they are an excellent step in the right direction as we try to level the playing field for everyday Americans who are trying to earn a fair living and play by the rules," said Etheridge. "I will watch the CFTC's actions closely to ensure we move from planning to action for the remainder of 2009."

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