As the CFTC turns

Who knew such drama could play out at the staid offices of a Washington DC financial regulator?  Since we first reported of Commodity Futures Trading Commission’s (CFTC) administrative law judge (ALJ) George H. Painter’s allegations of bias against fellow ALJ Bruce Levine, the story has gone viral and extremely personal information regarding the antagonists has been made public.

Painter, in a resignation letter (he is 83 years old), asked the agency to reassign his cases to an outside judge rather than allowing them to go to Judge Levine because Levine had stated to Painter privately, and demonstrated through his judicial record, to be biased against complainants. He attached a Wall Street Journal article from December 2000, which detailed Judge Levine’s penchant for ruling against complainants.

After Painter’s resignation letter became public, The Wall Street Journal (WSJ) published a story providing details of legal proceedings involving Painter and his wife, Elizabeth Ritter (who is a lawyer at the CFTC). The documents are from a guardianship case brought by his wife and claim Painter suffers from a range of medical problems including mental illness and alcoholism, which led to a 21-day stay in a geriatric psychiatric ward in June, according to Court records. The two are also involved in divorce proceedings which were initiated by Painter according to WSJ. 

The WSJ story cites contrasting medical opinions of Painter's capacity to care for himself.

Earlier this week the CFTC rejected Judge Painter request, reassigning his cases to Judge Levine but had no comment on the controversy. Nor did Judge Levine.

As interesting and perhaps tragic as the details may be, they don’t address the issue that should be most important, Painter’s allegations. The 2000 WSJ article goes into great detail and includes an example of the commission overturning one of Levine’s decisions “to avoid manifest injustice.” The story has been picked up by political blogs and comment boards atwitter over how the substantive nature of Painter’s claims have been pushed aside. 

I find that disturbing as well. The 2000 WSJ story raised enough questions regarding Levine’s record that it is unfathomable to think that nothing seems to have come of it. An attorney who has argued cases before both judges pointed out to us that the enforcement division of the CFTC even avoids bringing cases before its judges, choosing civil court instead to avoid Judge Levine. Other attorney's have raised questions regarding Judge Painter's work and pointed out that Judge Levine's reputation is strong, but there is the matter of the record.

Here is what we do know, serious allegations have been brough against one judge who has an incredibly one sided track record, apparently without any further investigation 10 years after questions first arose. The other judge was diagnosed with  "cognitive impairment, alcoholism and depression" in March 2008 according to a court petition.

At Futures we are constantly looking for new ways to reach as many of our readers as possible and, like everywhere else, we are trying to utilize the explosion in technology and social media to widen our scope. Readers can share Web stories of interest with friends and colleagues via the various social media sites with a click of a button. Our software tracks how many times a particular item has been shared.  The story on Judge Painter’s request to move his cases was shared 430 times, easily a record for us and, I believe, a demonstration of the dilemma facing the CFTC. My guess is a good portion of that volume went to or from traders who had lost a CFTC reparations case before Judge Levine. And perhaps to or from attorneys asking or being asked if those folks who lost those reparation cases have a course of action against the CFTC, given Judge Painter’s claims.

The CFTC has been quiet about this, but it is not the type of thing that will just go away. While understanding that the agency has quite a bit on its plate and these allegations come out at as bad a time as could be (though when would be a good time for something like this?), it is something that the agency just can’t ignore. It needs to be addressed. The sooner the better.

About the Author
Daniel P. Collins

Editor-in-Chief of Futures Magazine, Daniel Collins is a 25-year veteran of the futures industry having worked on the trading floors of both the Chicago Board of Trade and Chicago Mercantile Exchange. Dan joined Futures in 2001 and in 2005 he was promoted to Managing Editor, responsible for overseeing all the content that went into Futures and futuresmag.com. Dan’s incisive reporting and no-holds barred commentary places him among the most recognized national media figures covering futures, derivative trading and alternative investments.

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