Wall Street suffered a rare courtroom loss on Wednesday after a federal judge sided with regulators who wanted to keep a closer eye on freewheeling derivatives trading.
In a 93-page ruling, the judge dismissed a lawsuit that financial industry groups filed against the Commodity Futures Trading Commission, a Wall Street regulator. The groups, the United States Chamber of Commerce and the Investment Company Institute, challenged a rule that forced mutual funds and other investment companies to register with the commission.
“”This is a total victory not just for the C.F.T.C., but also for financial reform,” said Dennis Kelleher, the head of Better Markets, an advocacy group that supports Dodd-Frank, which was created in response to the 2008 financial crisis.
The ruling, Mr. Kelleher argued, could cast a chill on other attempts to sue federal regulators. “Hopefully, the industry will see this as a sign to call off their war on regulation and the regulators.”
The legal battles have hinged not on the merits or constitutionality of Dodd-Frank but on whether regulators fully studied its effects. Wall Street has built its case around a legal provision that required regulators to evaluate the costs and the benefits any rule would impose on the economy.”
Read Ben Protess’ full New York Times article here