CFTC COMMISSIONER CHILTON'S CONCURRENCE WITH ORDER REGARDING JPMORGAN MARKET MANIPULATION CASE

FROM:  COMMODITY FUTURES TRADING COMMISSION 
Concurrence of Commissioner Bart Chilton in the Matter of JPMorgan Chase, N.A. (JPMorgan)
October 16, 2013

I concur with this Order. For too long, our manipulation standard under the Commodity Exchange Act has been too high a hurdle.  Here's the proof: we've only successfully litigated one case in the Agency's 38-year history.

The authority being used in this instance—Section 6(c)(1) of the Act and our Rule 180.1—is the result of a new Dodd-Frank provision which provides the Commission with more flexibility to go after reckless manipulation in markets. It is a provision I supported and one championed by Senator Maria Cantwell.

I've continually sought appropriate penalties for violations of the Commodity Exchange Act.  I still seek a statutory change from our current puny penalty regime. That said, the $100 million JPMorgan sanction, along with the banks’ admission of deploying a recklessly aggressive trading strategy, seems an appropriate amount for the egregious manipulative conduct that took place on February 29, 2012.

Admitting to these findings of fact needs to be something part and parcel to these types of settlements.  All too often, a firm will neither admit nor deny any wrong doing. That needs to stop. I've been calling for the Agency to ensure that this occurs and commend the enforcement professional involved in this matter for their work.  I would not have supported the Order unless JPMorgan had admitted to such findings of fact.  Going to court on the matter would have been an acceptable avenue from my perspective.

Our Division of Enforcement has done an exemplary job on this case.  Doing so under normal circumstances is challenging, but concluding this matter during the government shutdown is extraordinary. I commend our Director of the Division of Enforcement, David Meister, and the team that has worked on this: Joan Manley and Paul Hayek, Saadeh Al-Jurf, Traci Rodriguez, Allison Shealy and Dan Ullman.

Finally, the day before the October 1st government shutdown, the CFTC returned a billion dollars to the Treasury.  These are monies collected from various civil monetary penalties and settlements. The following day, boom boom out went the lights at the CFTC.  Markets aren't being watched by the Agency, and only the most limited of functions are being carried out.  The matter today is a significant exception.

All it would take to keep the Agency open and on the job is for Congress to approve one single sentence to allow the CFTC use of the types of funds we returned. We have at least $100 million sitting there right now, unused, and with this settlement, there will be an additional $100 million.

This is a common sense provision that I, once again, respectfully urge Congress to immediately consider.