Comment letters sent to the CFTC recently have caused a stir, because whoever authored them, pretended they were written by an H.J. Heinz executive, a Burger King franchise and five other Arkansas-based officials or businesses.And they weren’t.
Such actions blatantly contravene the False Statements Act.
Dewey Square is a Boston-based Public Affairs firm hired (by a client it refuses to name*) to send comment letters to the Commodity Futures Trading Commission (CFTC), complaining about banks cartel-like control of the $583 trillion swaps market, according to Bloomberg.
Public comments on proposed rules and industry submissions pending CFTC action are welcomed by the regulator, and can be posted to the agency’s website. The same can be done at the SEC’s website, and has been, with hilarious results.
The problem letters sent by a sub-contractor that was not authorised by Deweu, however, are illegal considering the signatures were (allegedly) forged.
Here’s what the comments said, according to Bloomberg,
The fraudulent letters to the CFTC were critical of banks for their “cartel-like control” of the $583 trillion swaps market. The letters were in response to a CFTC proposal to limit conflicts of interest in clearinghouses and trading platforms in the swaps market. Dewey Square said some letters also were sent to the Securities and Exchange Commission, which is considering similar rules.
Whoever is found guilty of writing the letters will face fines and possibly jail time.
One question: Fake letters have been sent to the CFTC before without repercussion. So what gives?
*rumours are floating that the guilty party is Nasdaq OMX Group, which was known to have been lobbying congress over regulation regarding the cartel-like ownership of derivatives clearinghouses, as Dodd-Frank was being hammered out last year.
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