From the July 01, 2009 issue of Futures Magazine • Subscribe!

New CFTC head under fire

While Senator Bernard Sanders (I-VT) dropped his objection to Gary Gensler’s nomination to be chairman of the Commodity Futures Trading Commission (CFTC), allowing Gensler to finally take this post, he has not wavered in his belief that speculators, not supply and demand, was and is responsible for the movement of energy prices.

And the day after Gensler was sworn in, Sanders sent him a letter stating his expectations for the agency that if followed through on could have a chilling effect on managed futures and index fund investors. Sanders noted in the letter, “All of us have a responsibility to do everything we can to lower oil and gas prices immediately” and encouraged Gensler to make clear that he is prepared to use emergency powers such as imposing new speculation limits, increasing margin requirements and even suspending trading in certain funds if necessary to ensure that oil prices accurately reflect the forces of supply and demand.

Sanders also urged the new chairman to take away the hedge exemption from bank holding companies such as Goldman Sachs and Morgan Stanley in relation to their operation of index funds.

NFA EXPELS LAKE SHORE

In May, the National Futures Association (NFA) expelled Bermuda- based commodity trading advisor/commodity pool operator Lake Shore Asset Management Ltd. from NFA membership.

The ruling stems from NFA and CFTC complaints against Philip J. Baker, who controlled Lake Shore and its related commodity pools. In April 2008 the U.S. district court in Chicago entered a default judgment against Baker, Lake Shore and related companies for misappropriating more than $11 million, misrepresented profits and losses and failure to disclose other information relevant to commodity pools.

An NFA business conduct committee found that Lake Shore failed to cooperate with an NFA investigation, provided false information and used false or misleading promotional material.

HOT NEW CTAS

Futures is looking for the best new commodity trading advisors to profile in our annual feature. If you will have managed customer funds for at least one year as of the end of August and have less than $25 million under management, mail your disclosure document and audited track record to Daniel P. Collins, Futures Magazine, 222 S. Riverside Plaza, Suite 620, Chicago IL. 60606. E-mail: dcollins@futuresmag.com Deadline: Friday August 21, 2009.

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