Goldman Sachs Group Inc., Morgan Stanley and U.S. futures exchanges are fighting efforts by Congress to give two regulators authority over the $4.2 trillion commodities market, a move they say will drive trading overseas.
At issue is whether the Federal Energy Regulatory Commission, armed with new powers, can levy fines against failed hedge fund Amaranth Advisors LLC for manipulating natural-gas futures prices. Goldman and Morgan Stanley, working through their trade group, say Amaranth should only face discipline from its current regulator, the Commodity Futures Trading Commission.
The energy agency, meanwhile, is being urged on by California Senator Dianne Feinstein and House energy committee Chairman John Dingell. If FERC succeeds with Amaranth, opening the door for the agency to pursue other market-manipulation cases, banks might quit U.S. exchanges for overseas markets, says Craig Pirrong, a professor at the University of Houston....MORE