Defining Market Manipulation

Market prices for commodities and futures should reflect the legitimate forces of supply and demand. The CFTC’s position-limit rules seek to spare the market from harm by speculation outside those natural forces.

September 1, 2012

The position-limits rules passed last year by the Commodity Futures Trading Commission (CFTC) landed with a thud. The rules propose to govern derivatives tied to 28 different commodities and limit both certain on-exchange futures as well as some off-exchange options on futures and swaps. Generally viewed as weak, the rules nevertheless drew protest — and a legal challenge — from financial industry members. 

As that lawsuit winds its way through the court system, traders may be wondering what framework for enforcement will be used when — and if — the rules ultimately are implemented. Court cases discussing the conduct that constitutes market manipulation can serve as one place to look for guidance.

Reprinted with permission from FuturesMag.com Copyright 2012 by The National Underwriter Company doing business as Summit Business Media. All Rights Reserved.

The articles on our website include some of the publications and papers authored by our attorneys, both before and after they joined our firm. The content of these articles should not be taken as legal advice. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the views or official position of Robins Kaplan LLP.

Disclaimer

Thomas C. Mahlum

Partner

Co-Chair, Health Care Litigation Group

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