Former acting CFTC chairman resigns from commodities oversight agency

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 16 -- Walter L. Lukken, who was the US Commodity Futures Trading Commission’s acting chairman from June 2007 to January 2009, resigned from CFTC on June 16.

Lukken, whose resignation will be effective on July 10, drew heavy fire from congressional critics for not moving more aggressively to close the so-called “Enron loophole,” a provision in the 2000 Commodity Futures Modernization Act which created commodity classes that were excluded or exempt from regulation.

US Sens. Byron L. Dorgan (D-ND), Maria Cantwell E. Cantwell (D-Wash.), and Thomas R. Harkin (D-Iowa), and Reps. Bart Stupak (D-Mich.) and John B. Larson (D-Conn.) all said the provision created opportunities for speculators to manipulate commodity prices, leading to last year’s crude oil price spike, by taking bigger positions on unregulated overseas exchanges than would have been allowed on domestic trading platforms.

Lukken convened a conference on rising crude oil prices and commodities’ possible role in October 2007 and began to investigate ways in which CFTC could examine the allegations more closely. Existing law kept the commission from issuing subpoenas in several key instances, and CFTC had to ask traders to provide information voluntarily.

It nevertheless was able to determine that in some instances, index funds and swaps apparently performed a price discovery function even though they were not regulated. Congress gave CFTC authority in late 2008 to require that documents and records be provided, and the commission used it for the first time on June 9 as it opened an investigation of a financial instrument trading on the Intercontinental Exchange.

Lukken, who became a CFTC commissioner in August 2002, also pushed for closer working relationships with the US Federal Energy Regulatory Commission, the US Securities and Exchange Commission, and the US Federal Reserve as it became increasingly apparent that the nation’s financial regulation had not kept pace with markets. He also promoted CFTC’s sharing information with its counterparts in other countries.

He has accepted a position as senior vice-president of global market structure in NYSE Euronext’s office of general counsel.

Contact Nick Snow at nicks@pennwell.com.

Related Articles

Financial questions seen for US shale gas, tight-oil plays

03/25/2014 Financial problems of operators in US shale gas and tight oil plays might hold production growth below current expectations, according to the autho...

MARKET WATCH: Front-month crude oil contract closes up, gas down on week

03/24/2014

The front-month crude oil contract ended the week higher Mar. 21 while natural gas futures prices edged slightly lower.

Industry group welcomes most UK budget moves

03/21/2014 Oil & Gas UK voiced support for all but one of several measures affecting the offshore producing industry announced in the UK government’s annu...

MARKET WATCH: Crude oil, gas futures prices slide entering spring

03/21/2014

The first day of spring in the northern hemisphere was marked by lower crude oil and natural gas futures prices.

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected