District Court Judge Rejects CFTC Manipulative Intent Standard

Summary: On September 30, 2016, Judge Analisa Torres of the Southern District of New York issued an order resolving competing motions for summary judgment in the Commodity Futures Trading Commission's (CFTC) ongoing action against Donald R. Wilson and his firm, DRW Investments LLC, (together, DRW) for allegedly manipulating and attempting to manipulate the settlement price of certain interest rate futures contracts.¹ The order provides important guidance regarding the requisite intent to establish a manipulation or attempted manipulation claim under the Commodity Exchange Act (CEA).

The CEA's longstanding manipulation standard has always required proof that the defendant specifically intended to manipulate the market. However, the parties proposed substantially different interpretations of how this element should be applied in practice. The CFTC argued that this standard could be met by merely establishing "an intent to affect market prices." DRW, supported by amici