Judge rejects rule against speculative oil trading
A federal judge struck down another portion of the Obama administration’s Dodd-Frank rule that limited speculative trading on the oil market.
The New York Times reported that Judge Robert L. Wilkins of the U.S. District Court for the District of Columbia sent the rule back to the Commodity Futures Trading Commission (CFTC) for review.
The rule put limits on the amount of derivatives contracts traders could hold on 28 commodities, including oil, in an effort to curtail the kind of trading blamed for inflating gasoline prices.
“I believe it is critically important that these position limits be established as Congress required,” CFTC chairperson Gary Gensler said in a statement Friday. “I am disappointed by today’s ruling, and we are considering ways to proceed.”
The Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association sued to block the rule late last year, arguing that it would instead cause price swings.
Last year, a federal appeals court struck down (PDF) a rule set by the Securities and Exchange Commission that would have allowed shareholders in a publicly-traded company to nominate directors.
In a separate statement, advocacy group Public Citizen criticized Friday’s decision, saying, “The winners and losers from this ruling are clear: Wall Street wins, consumers lose.”
[Image via Agence France-Presse]