URGENT >> BULLETIN >> MOVING: CFTC Chairman Issues Extraordinary Statement In Response To Congressional Proposal To Cut Agency Budget In Wake Of White-Collar Fraud Epidemic And Expanded Responsibilities

UPDATED 9:05 P.M. EDT (U.S.A.) The white-collar fraud epidemic has become a political football — one that actually uses a football analogy. This is a statement from Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission:

“The result of the House bill is to effectively put the interests of Wall Street ahead of those of the American public by significantly underfunding the agency Congress tasked to oversee derivatives – the same complex financial instruments that helped contribute to the most significant economic downturn since the Great Depression.

“The CFTC’s hardworking staff is just 10 percent more in numbers than at our peak in the 1990s, yet Congress has now directed the agency to oversee the swaps market that is eight times larger than the futures market. Picture the NFL expanding eightfold to play more than 100 football games in a weekend, leaving just one referee per game, and, in some cases, no referee. Imagine the mayhem on the field, the resulting injuries to players, and the loss of confidence fans would have in the integrity of the game.

“We would not want similar mayhem and loss of confidence in markets so critical to farmers, ranchers and end users that may result from this bill’s significant underfunding of the CFTC.”

The statement comes on the heels of vote by the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies to cut the CFTC budget, the agency said on its website.

It also occurred on the same day the CFTC announced that it had filed and simultaneously settled charges against Luis Salazar-Correa of Las Vegas.

Salazar-Correa and his Nevada-based company, Prosperity Team LLC, were accused of fraudulently soliciting at least 183 individuals and drafting them into a Forex Ponzi scheme that gathered at least $2.482 million.

Demonstrating that the fraud epidemic is a global plague and that the world’s antifraud agencies are cooperating in a bid to tame the beast, CFTC thanked the Cyprus Securities and Exchange Commission, the International Financial Services Commission of Belize, the Swiss Financial Market Supervisory Authority and the U.K. Financial Services Authority for assisting in the Salazar-Correa/Prosperity Team probe.

CFTC also thanked the FBI, the SEC and the U.S. Attorney’s Office in Nevada.

In March Congressional testimony, Gensler said the agency needed both more employees and more money to carry out its tasks.

The CFTC, Gensler said in March, needed to add about 305 employees to its current staff of 710 to keep up with its expanded responsibilities. It also needed an additional outlay of tens of millions of dollars, the chairman said.

But Rep. Jack Kingston, a Georgia Republican, apparently has joined other politicians in advancing a bill that would slash $25 million from CFTC’s current budget of about $205 million.

In the era of white-collar fraud, the proposed bill would provide the CFTC only $25,000 “for the expenses for consultations and meetings hosted by the Commission with foreign governmental and other regulatory officials.”

 

About the Author

Leave a Reply