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Clifford Chance

Clifford Chance


Trading Freedom in the Age of Heightened Market Protection: The U.S. CFTC's Expanding Interpretation of Price Manipulation

22 February 2016

The CFTC is taking a position in enforcement litigation that would lower the bar for proving unlawful price manipulation.  By abandoning the requirement of proving that the accused had a specific intent to create an artificial price and replacing it with an intent to influence price, the CFTC would materially ease its burden of proof.  While doubtlessly motivated by the desire to enhance price integrity, the CFTC's position is being strongly questioned from a legal and a policy point of view by the futures industry.  A group representing the major futures industry institutions and trade associations is seeking to oppose the CFTC in an amicus brief on grounds that the CFTC's position deviates from decades of precedent and would blur the line between legitimate trading and manipulation to create inappropriate legal uncertainty, which would act to the detriment of well-functioning markets.

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