When former Congressman John Dingell died on February 7 it brought to mind the differences between the Securities and Exchange Commission (SEC) and the Commodity Futures Exchange CommIssion (CFTC). The first was founded in 1934 and the second was founded in 1974.
Joseph Kennedy, father of John F Kennedy and the Kennedy clan, was appointed by President Franklin Delano Roosevelt to chair the new independent agency. From all accounts he assembled a top notch team of lawyers and did a terrific job.
Forty years latter I had a key role in creating the CFTC as the young general counsel of the Senate Agriuculture Committee under Chairman Talmadge. With the able assistance of the young chief economist of the Chicago of Trade Richard Sandor I drafted the legislation to establish the CFTC.
Talmadge was a person who believed in getting things done quickly. He moved the legislation through Committee and the full Senate in record time. Even more Important, he kept the old Texan Bob Poage fully informed from the beginning. The House Agriuculture Committee reported the bill, and it soon passed the full House.
By that time Chairman Dingell had gotten concerned. He had long been Chairman of the the Energy and Commerce Committee, which was the oversight committee for the SEC. He sent his people to lobby us, but it was too late. The legislation had passed both Houses in slightly different forms and the staff was working out the few differences. I remember this clearly because a lawyer from the House Committee was screaming at the representatives of the SEC.
There has always been a feeling among people who were regulated that the SEC was much tougher than the CFTC. In the Bernie Madoff scandal 10 years ago the Madoff was sentenced to 150 years in jail. As I pointed out in a previous blog there were at least 11 high profile celebrities who Madoff stole millions from.
We do yet know how much money was stolen in the OPTIONSELLERS/INT FCStone case, but I hope that the CFTC and the oversight committees in Congress can find out. Only a court of law can determine if anyone will go to jail
Michael R. McLeod