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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Saturday, March 10, 2012

CFTC Chairman Gensler, Formerly of Goldman Sachs

Bart Chilton, a commissioner on the CFTC, was interviewed on Saturday, March 6, 2012, by Chris Hayes on MSNBC.  Chilton mentioned that the work of the Commission was being slowed down by the actions of one of its commissioners, Scott O'Malia, who wanted the Office of Management and Budget, a White House Office, to analyze the work of the Commission and do a cost/analysis of its rule-making.  Because of lobbying by Wall Street, about 70% of the rules have not been completed by their deadline.

Chairman Gary Gensler may be doing a good job but because he was against regulation before 2008 and because he worked for Goldman Sachs (which has a very definite point of view against regulation), he, too, seems to embody those qualities of some of the members on the Commission who do not particularly like the work of the Commission.

It would have been wiser to have re-vamped the entire CFTC after 2008 so that the independence of the Commission members not only is independent in name but also appears to be independent in practice.

Scott O'Malia, Commodity Futures Commissioner, Seeks To Upend Wall Street Reform (Updated)
By Zach Carter - HuffPost Politics

. . . .

Last week, O'Malia wrote a little-noted letter to the OMB asking it to review the cost-benefit analysis that the CFTC had used in writing new rules against Wall Street conflicts of interest. O'Malia contended that his agency had violated OMB standards and two Obama-issued executive orders by failing to adequately consider certain regulatory costs highlighted by financial industry groups.
O'Malia said in his Feb. 23 letter, "I am writing to request that the Office of Management and Budget (OMB) review the cost-benefit analysis" undertaken by the CFTC. "President Obama was very clear in his two Executive Orders that he expected the highest standards of analysis to validate the necessity of government rulemaking to ensure we don't impose undue and unfounded economic burdens on market participants and the public as a whole," he continued in his Feb. 23 letter. "I don't believe the Commission's rulemakings comply with this directive."
As an independent agency, however, the CFTC does not answer to OMB. The Obama administration does not have the authority to approve or reject the CFTC's calculations. And while the president issued executive orders in 2011 urging regulators to avoid issuing or revise overly burdensome rules, neither order applies to O'Malia's request. One executive order does not apply to independent agencies, while another does not apply to cost-benefit analysis.
Moreover, cost-benefit analysis of regulations is a notoriously subjective enterprise. Some shareholder-friendly experts argue that its value lies only in assessing specific companies' burdens, while others believe it should include effects on the broader economy and the environment.
. . . .

In a detailed letter of his own, Kelleher of Better Markets, argued that it would be not only illegal for OMB to comply with O'Malia's request, but a procedural nightmare that would create a damaging new precedent for government functionality.
"This attempt to attack the [CFTC] both from within and by enlisting an Executive Branch agency, initiated by a single Commissioner who was on the losing side of a vote, would open up a Pandora's Box of foreseeable and unforeseeable consequences," Kelleher wrote. "At minimum, it would incentivize every dissenting commissioner at any independent agency to seek OMB's help in undermining an agency decision with which they disagreed."
Read the rest of the article here 

The BNN video with Chilton (starts at 4:44) is here


Laser Haas said...

Any chance of culpability and reform goes farther out the window as time continues to go bye bye...

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