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Allison Baker Shealy discusses Commodity Futures Trading Commission in Bloomberg BNA

December 8, 2016

Allison Baker Shealy, member of the White Collar, Securities Enforcement, and Government Investigations practice group at Shulman Rogers, was quoted in the December 8, 2016 Bloomberg BNA article titled, “Narrowing CFTC Enforcement Possible Under Trump, Lawyers Say.”

A note from Allison:

The Dodd-Frank Wall Street Reform Act was a direct reaction to the market practices that resulted in the Great Recession that began as President Barack Obama took office.  There was an emphasis at the CFTC and other agencies, like the SEC and DOJ, to find and bring cases against the people who were responsible.  I think that the futures and swaps markets are all in a “wait and see” mode now with the election of Donald Trump as President.  We’re all anxious to see what major changes are made to Dodd-Frank, who Trump appoints as Chairman of the CFTC, who he chooses to fill the vacant Commissioner spots, and who the Chairman appoints as Director of Enforcement.  While the Enforcement trial attorneys will continue to bring fraud cases, trade practice cases, and major manipulation cases like LIBOR and the FX benchmarking cases, we may see an emphasis from the top down to back away from cases that might be deemed “borderline” or “too aggressive.”  Unfortunately, so much of the presidential campaign was focused on the personalities of the candidates that we don’t know a lot about President-Elect Trump’s platform and proposals for agencies such as the CFTC.  


Allison Baker Shealy, a former CFTC trial attorney who worked on the London Whale case, agreed there’s a perception by some that the CFTC has used its Dodd-Frank anti-manipulation authority too broadly. “It’s possible that could be dialed back,” she said.

At the same time, Shealy said that there’s “a strong argument that the CFTC should have the ability to step in and take action when a market participant knows or should know that its actions could have a significant, manipulative effect on a market and acts anyway.”

Read the full Bloomberg BNA article here