Clifford Chance

CFTC Declines to Appeal Sharply Worded Rejection of its Bid to Expand the Offense of Price Manipulation

28 February 2019

In December 2018, a New York federal court rejected an attempt by the U.S. Commodity Futures Trading Commission to redefine the scienter requirement for market manipulation from an intent to create an artificial price to an intent to merely influence the price. The Court's decision came in the long-running CFTC civil enforcement case against DRW Investments, LLC and its CEO. The Court found that DRW believed that its bids were in line with market value and were placed with a desire to transact. The Court then concluded that where a trading pattern is supported by a legitimate economic rationale, it cannot be the basis for liability as a basis for price manipulation or attempted price manipulation under the CEA.

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