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MFA submitted comments to the Basel Committee on Banking Supervision ("BCBS") regarding the treatment of segregated initial margin under the supplementary leverage ratio ("SLR") set out in the BCBS document titled: " Basel III Leverage Ratio Framework and Disclosure Requirements ." MFA stated that it is "very concerned" that the SLR does not account for the fact that segregated customer initial margin for centrally cleared derivatives cannot be used to leverage the customer's clearing member firm. According to MFA, customers post initial margin to their clearing firms for the benefits of

The Government Accountability Office ("GAO") issued a report assessing the CFTC compliance with procedural steps required by Section 801 of Title 5 of the United States Code with respect to conducting a cost benefit analysis of the Volcker Rule. The GAO found that the CFTC complied with the applicable requirements, and did not need to conduct a cost benefit analysis of the new rules regarding proprietary trading. In the report, the CFTC specified that the final Volcker Rule was promulgated exclusively under Bank Holding Company Act Section 13 ("Prohibitions on Proprietary Trading and Certain

Commentary by Bob Zwirb

The U.S. Court of Appeals for the Second Circuit upheld a lower court's dismissal of JPMorgan as a defendant in a private suit filed against it for allegedly aiding and abetting Amaranth's alleged manipulation of natural gas futures in 2006. The plaintiffs had previously obtained a settlement of $77.1 million from Amaranth. JPMorgan served as Amaranth's FCM. The Second Circuit held that in order to prove JPMorgan aided and abetted Amaranth's manipulation, the plaintiffs were required to allege that JPMorgan knew that Amaranth specifically intended to manipulate the price of New York Mercantile

Commentary by Bob Zwirb

The U.S. Bankruptcy Court overseeing the liquidation of failed futures commission merchant MF Global Inc. ("MFGI") has approved a settlement between MFGI and a class of former customers of MFGI for the return of $100 million of customer money to the class. The agreement resolves claims against JP Morgan, and all outstanding matters between JP Morgan and the MF Global estate, its customers and creditors, which arise from transfers of customer property during the days before MF Global entered into bankruptcy. See: Deangelis v. Corzine Settlement Agreement (03-19-2013); Deangelis v. Corzine

The CFTC filed a complaint against U.S. Bank for unlawfully using and holding Peregrine Financial Group's customer segregated funds. The complaint alleges that U.S. Bank unlawfully accepted Peregrine's customers' funds as security on loans it made, and that U.S. Bank improperly held Peregrine's customers' funds in an account which it treated as Peregrine's commercial checking account. See: Complaint: U.S. Bank, N.A. See also: CFTC Press Release.