Back in January, CFTC Chairman Gary Gensler said it was the CFTC’s position that the insider trading laws in the securities world should be expanded to the futures world, making it illegal to trade on non-public information from agencies like the U.S. Treasury, Federal Reserve and Department of Agriculture. Gensler cited the movie “Trading Places” to explain why such an expansion of the law should occur. As you may recall from the movie, Billy Ray and Winthrop intercepted the confidential Department of Agriculture “crop report” on orange crop forecasts, and used it to successfully sell short and corner the orange juice futures market before the report was publicly announced (and to simultaneously ruin the Duke brothers, who lost $394 million based on a false copy of the report). Gensler said that in real life, such trading based on “misappropriated government information is actually not illegal under our statute,” but should be in the CFTC’s view.
