The CFTC sued Louisiana on Nov. 13 to stop the state from banning event contracts after a court order shut down more than 30 companies.
Key Takeaways
- The CFTC filed a lawsuit against Louisiana on Nov. 13
- A Louisiana state court order shut down more than 30 companies connected to CFTC-regulated derivatives trading
- The CFTC says the defendants got no notice or chance to be heard
- Louisiana is the 12th state the CFTC has sued over derivatives jurisdiction
The Commodity Futures Trading Commission announced it filed a lawsuit against Louisiana to block the state from prohibiting the offering of event contracts by CFTC-regulated designated contract markets, futures commission merchants and derivatives clearing organizations. It said Louisiana obtained a state court order Thursday shutting down the operation of more than 30 companies in the state.
The agency said the order came without giving the defendants notice or an opportunity to be heard.
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What The CFTC Says About The Louisiana Order
Chairman Michael S. Selig said, "Event contracts have traded openly in Louisiana for years, in compliance with the Commodity Exchange Act and CFTC regulations."
Selig said the state's lawsuit seeks to shut down the entire prediction market industry. He called it "naked lawfare and a cynical political stunt."
He also said, "The Commission's lawsuit seeks to maintain the status quo while the federal courts decide this issue in an orderly manner."
A Growing Legal Fight Over Derivatives Markets
The CFTC said Louisiana is the 12th state it has sued to defend its exclusive jurisdiction over derivatives markets. It said Congress granted that jurisdiction under the Commodity Exchange Act.
The agency has also submitted amicus briefs in four federal Courts of Appeal and one state Supreme Court.
| Item | Figure |
|---|---|
| Companies shut down by Louisiana order | More than 30 |
| Louisiana's place among states sued by the CFTC | 12th |
| Federal Courts of Appeal with CFTC amicus briefs | 4 |
| State Supreme Court with a CFTC amicus brief | 1 |
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Originally published on Fathom News.
