Meyer Wilson

Recovering Losses Caused By Investment Misconduct

Retiring CFTC Judge Exposes Colleague as Biased and Corrupt

Just before he retired, former Commodity Futures Trading Commission judge George H. Painter issued a notice to the Commission that exposed his colleague, Judge Bruce Levine, as a biased and corrupt judge, according to an Oct. 19 Washington Post article. In his notice, Painter claimed that Levine told him almost twenty years ago that he had promised then-Chairwoman of the Commission Wendy Gramm that he would stand in the way of investor complaints and never rule in an investor's favor.

Congress created the Commodity Futures Trading Commission in 1974. Its mission is to regulate the commodities market and "protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options." Painter's claims of bias and misconduct imply that Levine and Gramm failed to uphold the Commission's responsibilities.

Painter and Levine worked together at the Commission for almost twenty years. As the Commission's two administrative law judges, it was their duty to preside over investor complaints that alleged misconduct by trading professionals or financial firms involved in the commodities market. According to the article, Painter wrote that he could not "in good conscience" turn his seven pending cases over to Levine and asked the Commission to enlist another federal administrative judge to take them.

"Judge Levine, in the cynical guise of enforcing the rules, forces pro se complainants to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case," wrote Painter. To back up his claims, he appealed to Levine's record. "A review of his rulings will confirm that he fulfilled his vow."

According to the article, in addition to Painter's claims, Gramm has been criticized by some politicians in Congress for her apparent role in assisting Goldman Sachs and Enron gain increased influence over the commodities market. The fact that she joined Enron's board after leaving the Commission lends weight to the criticisms.

This is not the first time Levine has been the subject of scrutiny for his CFTC record. Ten years ago, the Wall Street Journal published an article that claimed Levine almost never ruled in favor of an investor. In the few cases where he did rule for the complainant, his hand was forced by defunct firms that were unable to put together a defense.

While the CFTC has released Painter's notice, the Commission has declined to issue a formal comment on the matter.

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