Photo: Screenshot of CSPAN
Nearly a month after a US senator leaked confidential energy market information to the public in an attempt, he said, to show that big banks were artificially driving up prices, the calls for controls, probes and reforms have begun.During a Commodity Futures Trading Commission meeting Thursday, CFTC Commissioner Jill Sommers, a Republican, called on the agency to set up a process to better protect confidential market data.
In an opinion piece published in the Washington Post on Friday, James Newsome, a Republican and former CFTC chairman, and Fred Hatfield, a Democrat and former CFTC commissioner, called for changes at the CFTC.
“The commission should immediately review its policies and procedures for releasing confidential data,” Newsome and Hatfield wrote. “It should consult with fellow regulators to determine whether the highest standards and protections are being ensured.”
Last month, Senator Bernie Sanders, a Vermont Independent, released confidential market data revealing the positions that firms held in US gas, crude oil, heating oil and gasoline markets from December 30, 2007 to June 30, 2008.
What this data actually proves is a source of debate, but it is clear, several attorneys said, is that the CFTC did not break the law.
The CFTC is barred under Section 8 of the Commodity Exchange Act from sharing this information with the public, but may release it to certain members of Congress upon request.
Sommers said that “the time has come for [the CFTC] to establish a process to better protect confidential Section 8 material.”
Newsome and Hatfield called the data leak a “reckless, unprecedented action” which they said should be investigated by the CFTC and members of Congress.
“At a time when trust in government is at an all-time low, it is unconscionable that information members of the public supply to the government with the understanding that it will be held confidentially is released to the press for political purposes,” Newsome and Hatfield wrote. “Would it be OK for a federal official to leak information about an individual’s payments to the Internal Revenue Service because a government employee believes it bolsters a policy position he or she is promoting? Of course not.”
CFTC Chairman Gary Gensler, who had previously refused to comment on the data leak, gave no indication last week that a review of information sharing practices was under way. Gensler, however, said that the agency would continue to “make sure that the information that comes in to us, whether its futures or swaps, remains confidential under the mandate from Congress.”
On Friday, Tamara Hinton, a spokesman for the House Agriculture Committee, which has the CFTC within its jurisdiction, said the committee’s leadership had no plan “at present” of investigating the data leak.
At the same time, however, Commissioner Bart Chilton, a Democrat, said the criticism and concern swirling around the leak may be a bit overblown and said the CFTC may want to look at what information they do decide to release.
“The law is clear that the CFTC should not release privileged information except to Congress,” Chilton said after Thursday’s meeting. “There are certainly times when contracts have not expired and in illiquid markets where the release of such data could be very problematic. That said, as a policy question, I’m not so sure that the release of three-year old information in what are very deep and liquid markets provides anyone with top secret trading data that can still impact business strategies.”
While he said what information is released might be a “policy question” the agency should look at, he did not commit to a call by consumer advocacy group Public Citizen, who has called on the agency to release these positions to the public once every other week.
“This first-ever disclosure of company-specific trading information has provided the public with a critical window on the companies and entities holding large positions in energy commodity markets,” wrote Tyson Slocum, the director Public Citizen’s Energy Program, in a letter to the CFTC last month.
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