Wednesday, October 20, 2010
1 of the 2 Administrative Judges at the Commodity Futures Trading Commission Vowed NEVER to Let a Complainant Win. He's Kept His Promise for 20 Years
The Commodity Futures Trading Commission (CFTC) is an important agency. It is largely responsible for regulating derivatives and other important instruments.
It is supposed to prevent and prosecute fraud.
So it is stunning that one of the two administrative judges for the CFTC has written and filed a "Notice and Order" saying:
There are two administrative law judges at the Commodity Futures Trading Commission: myself and the Honorable Bruce Levine. On Judge Levine's first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant's favor. A review of his rulings will confirm that he has fulfilled his vow. Judge Levine, in the cynical guise of enforcing the rules, forces pro se complaints to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case.
In light of these unfortunate facts, if I simply announced my intention to retire, the seven reparation cases on my docket would be reassigned to the only other administrative law judge of the Commission, Judge Levine. This I cannot do in good conscience. Accordingly, I recommend that the Commission request ... the services of an administrative law judge to be detailed to the Commission from [another] agency ....
Wendy Gramm is the wife of former Senator Phil Gramm (one of the main sponsors of the Commodities Futures Modernization Act 2000, which kept derivatives largely deregulated), and was heavily involved in the Enron scandal (see this and this).
Update: The Wall Street Journal has a piece out today claiming that Judge Painter is senile and more than a little nuts. I don't know whether or not that is true. But the 2000 Wall Street Journal article which Painter attaches to his Notice and Order does seem to show that - at least as of 2000 - Levine always ruled against the Complainant in cases where the Respondent showed up.
Judge Painter's claims can easily be checked by reporters by searching the CFTC database, and by speaking with Complainants who appeared before Judge Levine. You can start here.
H/t Karl Denninger and Daily Bell.