- Sep 26, 2000
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http://closetheenronloophole.com/
In 2000, Enron lobbyists seeking to exempt energy commodity trading from federal oversight were successful in passing the ?Enron Loophole.? Enron basically had the word ?energy? removed from federal commodities laws pertaining to certain types of trading environments. Virtually overnight, the loophole freed over-the-counter energy trading from federal oversight requirements, opening the door to excessive speculation and energy price manipulation. While Enron is long gone, its legacy remains. It is time to put ?energy? back into federal law where Enron had it removed, and close the loophole once and for all!
Under an administrative loophole, federal regulators can issue so-called ?no-action letters? to overseas energy trading platforms. As the letter?s name implies, the letter promises that ?no-action? will be taken against them to enforce U.S. anti-manipulation laws, even if those markets allow trading of energy products for delivery and consumption within the United States. One such ?no-action letter? allows the trading of US-based crude oil (West Texas Intermediate) and other products upon London?s InterContinental Exchange? even though that exchange is run out of Atlanta, Georgia and dominated by U.S. financial interests! American consumers come first - it is time to shut down the foreign ?dark markets? loophole and to stop issuing blank regulatory checks overseas!
The Commodity Futures Trading Commission (CFTC), the federal authority responsible for regulating trading activity on the energy commodity markets, does not currently have the tools, infrastructure, personnel and resources it needs to do its job. Currently, the CFTC receives one-ninth of the funding of its sister-agency, the Securities and Exchange Commission (SEC), which regulates the U.S. stock market. As a result, the CFTC?s ability to keep up with the industry they regulate is handicapped. The CFTC needs a drastic increase in funding, along with the regulatory tools necessary, to insure that all markets are effectively monitored, transparent and accountable.
Members of Congress need to put the interests of American families and small businesses before those of energy traders and hedge funds. Within the CFTC, their voice is not being heard either. Advisory committees have been established to provide input to commissioners on how best to regulate the markets. At present, these committees are dominated by traders, banks and other financial players, and do not include American energy consumer and small business interests. Congress and federal regulators should include consumers and small businesses when it asks for input on new rules, regulations and trading standards.
Billions of dollars have flowed through these loopholes and traders have reaped the rewards ? driving up the price of energy and, in some cases, manipulating it for personal profit. Congress needs to act now to make all energy markets fully transparent and accountable!
This is the first I heard of this. Is this a real problem?
btw I heard about this from a consortium of local fuel oil suppliers in NY and New Jersey.
In 2000, Enron lobbyists seeking to exempt energy commodity trading from federal oversight were successful in passing the ?Enron Loophole.? Enron basically had the word ?energy? removed from federal commodities laws pertaining to certain types of trading environments. Virtually overnight, the loophole freed over-the-counter energy trading from federal oversight requirements, opening the door to excessive speculation and energy price manipulation. While Enron is long gone, its legacy remains. It is time to put ?energy? back into federal law where Enron had it removed, and close the loophole once and for all!
Under an administrative loophole, federal regulators can issue so-called ?no-action letters? to overseas energy trading platforms. As the letter?s name implies, the letter promises that ?no-action? will be taken against them to enforce U.S. anti-manipulation laws, even if those markets allow trading of energy products for delivery and consumption within the United States. One such ?no-action letter? allows the trading of US-based crude oil (West Texas Intermediate) and other products upon London?s InterContinental Exchange? even though that exchange is run out of Atlanta, Georgia and dominated by U.S. financial interests! American consumers come first - it is time to shut down the foreign ?dark markets? loophole and to stop issuing blank regulatory checks overseas!
The Commodity Futures Trading Commission (CFTC), the federal authority responsible for regulating trading activity on the energy commodity markets, does not currently have the tools, infrastructure, personnel and resources it needs to do its job. Currently, the CFTC receives one-ninth of the funding of its sister-agency, the Securities and Exchange Commission (SEC), which regulates the U.S. stock market. As a result, the CFTC?s ability to keep up with the industry they regulate is handicapped. The CFTC needs a drastic increase in funding, along with the regulatory tools necessary, to insure that all markets are effectively monitored, transparent and accountable.
Members of Congress need to put the interests of American families and small businesses before those of energy traders and hedge funds. Within the CFTC, their voice is not being heard either. Advisory committees have been established to provide input to commissioners on how best to regulate the markets. At present, these committees are dominated by traders, banks and other financial players, and do not include American energy consumer and small business interests. Congress and federal regulators should include consumers and small businesses when it asks for input on new rules, regulations and trading standards.
Billions of dollars have flowed through these loopholes and traders have reaped the rewards ? driving up the price of energy and, in some cases, manipulating it for personal profit. Congress needs to act now to make all energy markets fully transparent and accountable!
This is the first I heard of this. Is this a real problem?
btw I heard about this from a consortium of local fuel oil suppliers in NY and New Jersey.
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