Markey, 100 Democrats Push to Fully Arm Wall Street Speculation Cops

Call on House Republicans to Fund CFTC to Crack Down on Excessive Oil Speculation

WASHINGTON (March 23, 2012) – With experts saying that excessive speculation is adding significant additional costs to the price of gas, Rep. Ed Markey (D-Mass.) and 100 of his Democratic colleagues in the House today called for the House Appropriations Committee to fully arm the Wall Street cops who can crack down on speculators who may be manipulating the market. Rep. Markey and his colleagues ask House Republicans who control the government’s purse strings to fully fund the Commodities Futures Trading Commission, who monitor, regulate and help prosecute speculative manipulation.

Speculators are using the diplomatic efforts to prevent Iran from manufacturing nuclear weapons to drive up oil prices. Some experts have estimated that up to 25 percent of the price of oil may be from speculation. That would mean that consumers are paying a 73 cent speculation premium on every gallon of gasoline.

“We must ensure that speculators are not taking advantage of the heightened volatility in the markets to reap unjustified profits,” write Rep. Markey and his colleagues. Rep. Markey is the top Democrat on the Natural Resources Committee. “We must ensure that the CFTC has the resources it needs to effectively implement these regulations that are critical to protecting American consumers from higher prices.”

The full letter can be found HERE.

Rep. Markey and the 100 other members of Congress ask in the letter for full funding at $308 million for the CFTC, so the agency can fully implement the financial reforms passed by the Democratic Congress in the Dodd-Frank legislation. That legislation included the requirement that the CFTC implement “position limits” which would restrict the number of commodities contracts, like oil futures, held by Wall Street trading firms. Increased concentration of those contracts can mean certain firms can have an outsized impact on the marketplace. While the new rules that the CFTC is issuing would likely limit the influence of certain trading firms, they would help protect average consumers and businesses from Wall Street manipulation.

Unsurprisingly, Wall Street trade groups have sued to block the position limits rule from being implemented. House Republicans have joined in the effort to tie the hands of the CFTC, trying to cut the agency’s budget by more than $30 million last year and moving legislation intended to delay CFTC regulations to prevent excessive speculation.