I am seriously concerned about the Commission’s rush to the wrong side of history because we are failing to put in the bare minimum amount of work necessary to get it right. It is my job to uphold the Commodity Exchange Act and the Commission’s jurisdiction so that we can faithfully execute our mission to protect the American people from fraud, manipulation, and abusive trading practices in our markets, and for that reason, I cannot stay silent. The alleged fraud in this case is reprehensible, and it is my hope that justice will be served and that the victims are made whole.
Once again, the Commission is taking a “ready, shoot, aim” approach to its enforcement actions, without allowing for a process that ensures appropriate legal review and a robust administrative record to enable reasoned decision-making by the Commission. It is no surprise that the Commission keeps missing the target and has been on a losing streak of high-profile decisions in our litigation cases all over the country. I will note that the U.S. Courts of Appeals for the Second Circuit, Seventh Circuit, and Fifth Circuit have all established negative precedents that are critically undermining the Commission’s jurisdiction and our ability to aggressively enforce violations of the Commodity Exchange Act—and all because of our self-inflicted wounds.
This Complaint fails to get the law right and, consequently, clearly plead facts necessary to support the alleged charge of Count V: Off-Exchange Retail Commodity Transactions in Violation of Section 4(a) of the Commodity Exchange Act, 7 U.S.C. 6(a). The Commission is engaging in an unprecedented overreach of its limited authority over spot commodity transactions by purposefully neglecting to state to the Court in Count V that Section 2(c)(2)(D)(i) grants authority to the Commission over only leveraged, margined, or financed retail commodity transactions—not all retail commodity transactions. The silence in Count V on this crucial limitation seems to be a brazen land-grab in an ongoing turf war, or at worst, designed to obfuscate the very real constraints that the Congress imposed on the Commission’s otherwise unchecked ability to go where it should not. The Complaint should be clear in connecting the dots for the Court, not cutting corners for convenience.
Quality matters, and so does doing things right. I cannot be complicit in the Commission taking shortcuts in its enforcement actions that ultimately result in our losing cases and losing jurisdiction. I am disappointed that the Commission has been forced into this position. Bad process begets bad outcomes.
