Enron loophole

The "Enron loophole" exempts most over-the-counter energy trades and trading on electronic energy commodity markets from government regulation.cite web|url=http://assets.opencrs.com/rpts/RS22912_20080707.pdf|title=The Enron Loophole|last=Jickling|first=Mark|date=2008-7-7|publisher=Congressional Research Service|accessdate=2008-07-24] The "loophole" is so-called as it was drafted by Enron Corporation lobbyists working with U.S. Senator Phil Gramm to create a deregulated market for their experimental "Enron On-line" initiative. [ [http://www.motherjones.com/news/feature/2008/07/foreclosure-phil.html "Mother Jones"] ]

The "loophole" was enacted in sections (h)(3) and (g) of the Commodity Exchange Act, 7 U.S.C. as a result of the Commodity Futures Modernization Act of 2000, signed by U.S. president Bill Clinton on December 21, 2000. It allowed for the creation, for U.S. exchanges, of a new kind of derivative security, the single-stock future, which had been prohibited since 1982 under the Shad-Johnson Accord, a jurisdictional pact between John S.R. Shad, then chairman of the U.S. Securities and Exchange Commission, and Phil Johnson, then chairman of the Commodity Futures Trading Commission.

On June 22, 2008, U.S. Senator Barack Obama proposed the repeal of the "Enron loophole" as a means to curb speculation on skyrocketing oil prices.cite news|url=http://www.msnbc.msn.com/id/25318274/|title=Obama vows crackdown on energy speculators: McCain fires back after Democrat tries to tie rival to 'Enron loophole'|date=2008-6-22|publisher=Associated Press|accessdate=2008-07-24]

References

ee also

*Commodity Futures Modernization Act of 2000