Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating: A Judge Isn't Fooled by the ICI's Email Routing List Email & Route  Print Print
Thursday, December 13, 2012

A Judge Isn't Fooled by the ICI's "Crocodile Tears"

Reported by Chris Cumming

Sometimes even the Investment Company Institute (ICI) loses a case to the regulators.

Yesterday, a U.S. district court threw out a challenge from the ICI and the U.S. Chamber of Commerce to a rule that would require mutual funds that trade in commodity futures to register as "commodity pool operators" with the Commodities Futures Trading Commission (CFTC). In a 93-page opinion, Judge Beryl A. Howell of the U.S. District Court for Washington, D.C., dismissed the ICI's claims that the CFTC had been "arbitrary and capricious" in enacting the rule and had done so without the cost-benefit analysis the law requires.

Judge Howell's opinion is, in parts, a stinging rebuke to the ICI's argument. She writes that the plaintiffs "get carried away with their own rhetoric" in arguing against the rule, that some of the groups' complaints "amount[] to crocodile tears," and that they "have thrown everything in the proverbial kitchen sink at the CFTC." She concludes that "[t]he CFTC fulfilled its obligation… to consider the costs and benefits of its proposed rule," and that "there was nothing arbitrary of capricious about the CFTC's actions" in proposing it.

The case was argued in late October, with Eugene Scalia, son of Supreme Court justice Antonin Scalia and the owner of a 5-and-0 record -- now 5-and-1 -- arguing cases against the government, representing the ICI and the Chamber.

The rule will require funds that trade in commodity futures to file reports with the CFTC on their leverage and counterparty risk. The ICI argued that the CFTC's oversight is not necessary, since the SEC already regulates mutual funds.

It is not clear if the ICI intends to appeal this decision. An ICI spokeswoman sent MFWire the following statement on the ruling: “We are disappointed with the court's ruling. We are reviewing the decision now and evaluating our options.”

Regulators and their supporters, meanwhile, are crowing about a rare legal victory over the financial services industry.

Dennis Kelleher, the head of Better Markets, a pro-reform advocacy group, told the New York Times, “This is a total victory not just for the C.F.T.C., but also for financial reform. Hopefully, the industry will see this as a sign to call off their war on regulation and the regulators.”

The news was also covered by Bloomberg. The Bloomberg reporter spoke with ICI president Paul Schott Stevens, who said that the rule, "if allowed to stand, will impose enormous costs and burdens" on fund firms and their shareholders.  

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use