From the December 01, 2007 issue of Futures Magazine • Subscribe!

Court upholds FERC suit

A November federal court ruling against Amaranth and its lead trader Brian Hunter raised the question of who’s really in charge when it comes to regulating energy futures. Both the CFTC and the Federal Energy Regulatory Commission (FERC) brought charges of price manipulation on what the court said were “essentially the same transactions” against the busted hedge fund in July. On Nov. 1, a U.S. federal court denied Amaranth’s request to stop FERC from continuing with its action while the CFTC’s lawsuit was still pending.

The simultaneous lawsuits against Amaranth raise questions about the CFTC’s supposed exclusive jurisdiction of futures contracts. Steps towards reauthorization of the CFTC are ongoing. The House Agriculture Committee held reauthorization hearings on Sept. 26 and Oct. 24. At the October hearing, subcommittee ranking member Jerry Moran urged the committee to move towards reauthorization as soon as possible.

“The CFTC has continued to operate far too long without proper reauthorization and sufficient funding,” Moran said in a statement.

“The House Agriculture Committee has held several oversight hearings this year on CFTC reauthorization, the committee has been working with the CFTC to develop legislative language during this process, and chairman [Collin] Peterson would like to get the reauthorization done as soon as possible,” a house aide says.

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