Expanding the Reach of the Commodity Exchange Act’s Antitrust Considerations

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Posted by Gregory Scopino, Georgetown University Law Center, on Saturday, May 13, 2017

Editor’s Note: Gregory Scopino is an Adjunct Professor of Law at Georgetown University Law Center and a Special Counsel with the Division of Swap Dealer and Intermediary Oversight (DSIO) of the U.S. Commodity Futures Trading Commission (CFTC). This post is based on a recent article authored by Professor Scopino, who wrote the article in his personal capacity and not in his official capacity as a CFTC employee. The analyses and conclusions expressed in the article (and this post) are those of Professor Scopino and do not reflect the views of other members of DSIO, other CFTC staff, the CFTC itself, or the United States.

In recent years, a small group of financial institutions have paid billions of dollars to settle civil and criminal claims that they formed cartels to rig the prices of certain critically important financial instruments and to stifle competition in others. For example, bankers would rig global benchmark interest rates, such as the London Interbank Offered Rate (LIBOR), for the purposes of benefitting their trading positions in over-the-counter (OTC) interest-rate swaps, which are bets on future interest rate movements. By conspiring with horizontal competitors to fix the benchmarks that were components of the prices of financial instruments, financial institutions and their employees harmed competition by distorting the normal market factors that governed the prices of those instruments. These collusive schemes were facilitated by the fact that the markets for certain types of derivatives are oligopolies dominated by a handful of global banks.

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May 13, 2017 at 07:32PM

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