CFTC mum on judge controversy

November 30, 2010 06:00 PM
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The CFTC denied the request of retiring Administrative Law Judge George H. Painter to have his remaining cases reassigned to a judge detailed from another agency.

Judge Painter created quite a stir when, in announcing his retirement in September, he made the request that his cases not be given to fellow CFTC Administrative Law Judge Bruce Levine, alleging Levine was biased against complainants. The request was part of a notice sent to complainants and their attorneys in Painter’s remaining cases. Painter claimed that Levine had told him that he had promised former CFTC Chair Wendy Gramm "that he would never rule in a complainant’s favor." Painter’s notice goes on to say, "A review of his rulings will confirm that he has fulfilled his vow." He included a 2000 Wall Street Journal article supportive of his allegations.

In its order, the CFTC stated that Judge Painter lacked the authority to make "this unusual request" and that the cases would be reassigned to the other judge, presumably Judge Levine.

Neither Judge Levine nor the CFTC would comment on Painter’s claims.

A more recent Wall Street Journal articlepublished after Painter’s allegations became public referenced court records from a guardianship petition filed by Painter’s wife claiming Painter has recently struggled with mental illness and alcoholism. The story cites conflicting medical opinions of Painter’s mental health.

Painter noted that if he simply retired, his remaining cases would be reassigned to Judge Levine, adding, "This, I could not do in good conscience."

Attorney James McGurk says there has been a tendency by the CFTC Enforcement Division to bring case to U.S. District court instead of administratively.

Attorney Mark Ruddy says he knows of one current complainant who plans to ask Judge Levine to recuse himself from the case. Ruddy does not believe Levine would do so because "it could be seen as an admission of bias."

The complainant could appeal Levine’s decision to the Commission and eventually to Federal appeals court.

While charges of past bias appear to open up the likelihood of appeals one attorney familiar with futures litigation suggested the CFTC order could put an end to it as it would be difficult to open up past cases. The attorney added that the CFTC reparation case process is seldom used with more complainants choosing to use the National Futures Association arbitration process.

About the Author

Editor-in-Chief of Modern Trader, 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.