Commodity Futures Trading Commission

The Commodity Futures Trading Commission will consider new measures to curb speculation in the markets for energy and other commodities, the agency is expected to announce today. Such a move, designed to reduce the volatility of prices, faces resistance from top Wall Street firms, which fear the effort could cut into their earnings. Regulators and lawmakers have expressed concern that these firms have used their size and power to inflate commodity prices, booking profits in the process.

Federal prosecutors say two principals of a foreign-currency trading firm have been arrested on suspicion of operating a Ponzi-like scheme that cost customers $15 million. Charles G. Martin, 43, of Malibu was arrested Tuesday in the Los Angeles area and John Walsh, 60, was arrested Wednesday in Illinois. The case is being prosecuted by the U.S. attorney's office in Chicago. Prosecutors say Martin and Walsh, as principals of One World Capital Group, diverted millions of investor dollars to pay for lavish lifestyles.

The Securities and Exchange Commission and the Commodity Futures Trading Commission said they would work more closely to speed approval of new financial products and coordinate fraud investigations. The SEC polices securities, stock exchanges and public-company disclosures. The CFTC regulates trading of futures and options. The agencies on Tuesday released a memorandum of understanding intended to guide their coordination. The Securities Industry and Financial Markets Assn., Wall Street's biggest lobbying group, has called for combining the SEC and CFTC.

The record-shattering run-up in energy and food prices has put investors who buy and sell such things on the hot seat -- so hot that some in Congress on Tuesday threatened action. "The American people are about to take out pitchforks" because of the cost of groceries and gasoline, Sen. Claire McCaskill (D-Mo.) said during a Senate hearing on whether commodities are being pushed higher by investors' high-stakes bets that prices will keep going up.

The top U.S. commodity regulator said Tuesday that it would require investors and index funds to disclose more information about their holdings in agricultural markets after farmers and lawmakers alleged that speculators had inflated food prices. The Commodity Futures Trading Commission, in an e-mailed statement, also said it would grant fewer exemptions to speculative-position limits related to agricultural index trading and would provide more detail on trader holdings starting next month.

"Recent substantial increases in the price of crude oil and other commodities have put considerable strain on American families, farmers and businesses," said Walter Lukken, acting commissioner of the Commodity Futures Trading Commission. "We share public concerns about the need for the utmost transparency and integrity in the energy futures markets." It's a time-honored Washington ritual. When the price of oil goes up, so does the blood pressure of politicians.

The U.S. Commodity Futures Trading Commission fined two former traders at power producers Mirant Corp. and Cinergy Corp. a total of $550,000 for attempting to manipulate natural gas prices in 2000. Christopher McDonald, a former vice president of trading at a Mirant subsidiary, and Michael Whalen, a former Cinergy trader, arranged to send false data to firms compiling indexes of natural gas prices to improve their trading positions, the Washington-based agency said.

The Commodity Futures Trading Commission said it was investigating a spike in U.S. natural gas prices and possible gas market manipulation in late 2003. Until now, the CFTC had refused to confirm it was carrying out such a probe. The agency said it was examining why gas futures contracts traded on the New York Mercantile Exchange more than doubled in price during a short period starting last November. In a Jan.