CFTC Sues Louisiana After State Court Blocks CFTC-Regulated Exchanges

WASHINGTON - The Commodity Futures Trading Commission today announced it filed a lawsuit against Louisiana to block the state from prohibiting the offering of event contracts by CFTC-regulated designated contract markets, futures commission merchants, and derivatives clearing organizations.

Louisiana obtained a state court order Thursday shutting down the operation of more than 30 companies in the state connected to the trading of CFTC-regulated derivatives products without giving the defendants notice or an opportunity to be heard.

"Event contracts have traded openly in Louisiana for years, in compliance with the Commodity Exchange Act and CFTC regulations," said Chairman Michael S. Selig. "The state's eleventh-hour 'emergency' lawsuit seeking to shut down the entire prediction market industry is naked lawfare and a cynical political stunt. The Commission's lawsuit seeks to maintain the status quo while the federal courts decide this issue in an orderly manner."

Louisiana is the 12th state the CFTC has sued to defend its exclusive jurisdiction over derivatives markets as granted by Congress under the Commodity Exchange Act. The CFTC has also submitted amicus briefs in four federal Courts of Appeal and one state Supreme Court.