Blumenthal: Support Mandatory Trading Limits, Combat Excessive Speculation And High Gasoline Prices

(Washington DC) – Senator Richard Blumenthal (D-CT), joined with eighteen Senate colleagues to file an amicus brief in federal court last week opposing an industry lawsuit intended to block the implementation of new rules to combat excessive speculation that contributes to high gas prices. 

The amicus brief, filed in support of the Commodity Futures Trading Commission (CFTC), explains that Congress intended to require the CFTC to impose position limits on speculators in U.S. commodity markets to combat excessive speculation and high prices for gasoline and crude oil as part of the Dodd-Frank financial reform legislation. 

The Senators wrote:  “After seven years of Congressional studies finding excessive speculation and price manipulation in the commodities markets due in part to regulatory loopholes and CFTC waivers of position limits, Dodd-Frank was designed and intended to make those position limits mandatory.” The brief also stated that, in the law, “Congress repeatedly referred to the limits as ‘required’ because it intended to make them so.  Had Congress intended to make position limits discretionary, it is inexplicable that it would have referred to them as ‘required’ rather than, for example, as ‘permitted’ or ‘authorized.’”

The amicus brief was filed by Senators Levin, Mark Begich (D-AK), Richard Blumenthal (D-CT), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Maria Cantwell (D-WA), Ben Cardin (D-MD), Dianne Feinstein (D-CA), Tom Harkin (D-IA), Patrick Leahy (D-VT), Joe Manchin (D-WV), Claire McCaskill (D-MO), Robert Menendez (D-NJ), Barbara Mikulski (D-MD), Bill Nelson (D-FL), Bernie Sanders (I-VT), Jeanne Shaheen (D-NH), Sheldon Whitehouse (D-RI), and Ron Wyden (D-OR).

The lawsuit at issue was filed by two industry groups, the International Swaps and Derivatives Association (ISDA) and the Securities Industry and Financial Markets Association (SIFMA), and asks the court to immediately suspend and ultimately invalidate the new rules.  The court has not yet ruled on either motion.

Position limits, which have been part of U.S. commodities law since 1936, are a recognized tool to reduce and prevent excessive speculation and price manipulation in commodity markets.

An amicus brief allows for a party not named in a case to provide information to assist the court in deciding on a matter. 

The case is in the U.S. District Court for the District of Columbia, International Swaps and Derivatives Association v. Commodity Futures Trading Commission, Civil Action No. 1:11-CV-2146-RLW.

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