Enron Corporation was an American energy,commodities,and services company based in Houston,Texas. It was founded by Kenneth Lay in 1985 as a merger between Lay's Houston Natural Gas and InterNorth,both relatively small regional companies. Before its bankruptcy on December 2,2001,Enron employed approximately 20,600 staff and was a major electricity,natural gas,communications,and pulp and paper company,with claimed revenues of nearly $101 billion during 2000. Fortune named Enron "America's Most Innovative Company" for six consecutive years.
A commodity market is a market that trades in the primary economic sector rather than manufactured products,such as cocoa,fruit and sugar. Hard commodities are mined,such as gold and oil. Futures contracts are the oldest way of investing in commodities. Commodity markets can include physical trading and derivatives trading using spot prices,forwards,futures,and options on futures. Farmers have used a simple form of derivative trading in the commodities market for centuries for price risk management.
The Gramm–Leach–Bliley Act (GLBA),also known as the Financial Services Modernization Act of 1999,is an act of the 106th United States Congress (1999–2001). It repealed part of the Glass–Steagall Act of 1933,removing barriers in the market among banking companies,securities companies,and insurance companies that prohibited any one institution from acting as any combination of an investment bank,a commercial bank,and an insurance company. With the passage of the Gramm–Leach–Bliley Act,commercial banks,investment banks,securities firms,and insurance companies were allowed to consolidate. Furthermore,it failed to give to the SEC or any other financial regulatory agency the authority to regulate large investment bank holding companies. The legislation was signed into law by President Bill Clinton.
William Philip Gramm is an American economist and politician who represented Texas in both chambers of Congress. Though he began his political career as a Democrat,Gramm switched to the Republican Party in 1983. Gramm was an unsuccessful candidate in the 1996 Republican Party presidential primaries against eventual nominee Bob Dole.
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. Futures exchanges provide physical or electronic trading venues,details of standardized contracts,market and price data,clearing houses,exchange self-regulations,margin mechanisms,settlement procedures,delivery times,delivery procedures and other services to foster trading in futures contracts. Futures exchanges can be organized as non-profit member-owned organizations or as for-profit organizations. Futures exchanges can be integrated under the same brand name or organization with other types of exchanges,such as stock markets,options markets,and bond markets. Non-profit member-owned futures exchanges benefit their members,who earn commissions and revenue acting as brokers or market makers. For-profit futures exchanges earn most of their revenue from trading and clearing fees.
The Chicago Mercantile Exchange (CME) is a global derivatives marketplace based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board,an agricultural commodities exchange. For most of its history,the exchange was in the then common form of a non-profit organization,owned by members of the exchange. The Merc demutualized in November 2000,went public in December 2002,and merged with the Chicago Board of Trade in July 2007 to become a designated contract market of the CME Group Inc.,which operates both markets. The chairman and chief executive officer of CME Group is Terrence A. Duffy,Bryan Durkin is president. On August 18,2008,shareholders approved a merger with the New York Mercantile Exchange (NYMEX) and COMEX. CME,CBOT,NYMEX,and COMEX are now markets owned by CME Group. After the merger,the value of the CME quadrupled in a two-year span,with a market cap of over $25 billion.
The Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974 that regulates the U.S. derivatives markets,which includes futures,swaps,and certain kinds of options.
The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that ensured financial products known as over-the-counter (OTC) derivatives remained unregulated. It was signed into law on December 21,2000 by President Bill Clinton. It clarified the law so most OTC derivative transactions between "sophisticated parties" would not be regulated as "futures" under the Commodity Exchange Act of 1936 (CEA) or as "securities" under the federal securities laws. Instead,the major dealers of those products would continue to have their dealings in OTC derivatives supervised by their federal regulators under general "safety and soundness" standards. The Commodity Futures Trading Commission's (CFTC) desire to have "functional regulation" of the market was also rejected. Instead,the CFTC would continue to do "entity-based supervision of OTC derivatives dealers". The CFMA's treatment of OTC derivatives such as credit default swaps has become controversial,as those derivatives played a major role in the financial crisis of 2008 and the subsequent 2008–2012 global recession.
The Garn–St Germain Depository Institutions Act of 1982 is an Act of Congress that deregulated savings and loan associations and allowed banks to provide adjustable-rate mortgage loans. It is disputed whether the act was a mitigating or contributing factor in the savings and loan crisis of the late 1980s.
John Douglas Arnold is an American philanthropist,former Enron executive,and founder of Arnold Ventures LLC,formerly the Laura and John Arnold Foundation. In 2007,Arnold became the youngest billionaire in the U.S. His firm,Centaurus Advisors,LLC,was a Houston-based hedge fund specializing in trading energy products that closed in 2012. He now focuses on philanthropy through Arnold Ventures LLC. Arnold is a board member of Breakthrough Energy Ventures and since February 2024,is a member of the board of directors of Meta.
Foreign exchange fraud is any trading scheme used to defraud traders by convincing them that they can expect to gain a high profit by trading in the foreign exchange market. Currency trading became a common form of fraud in early 2008,according to Michael Dunn of the U.S. Commodity Futures Trading Commission.
Lou Lung Pai is a Chinese-American businessman and former Enron executive. He was CEO of Enron subsidiaries Enron Energy Services and Enron Xcelerator,a venture capital division. He left Enron with over $250 million. Pai was the second-largest land owner in Colorado after he purchased the 77,500-acre (314 km2) Taylor Ranch for $23 million in 1999,though he sold the property in June 2004 for $60 million.
Multi Commodity Exchange of India (MCX) is a commodity exchange based in India. It was established in 2003 by the Government of India and is currently based in Mumbai. It is India's largest commodity derivatives exchange. The average daily turnover of commodity futures contracts increased by 26% to ₹32,424 crore during FY2019-20,as against ₹25,648 crore in FY2018-19. The total turnover of commodity futures traded on the Exchange stood at ₹83.98 lakh crore in FY2019-20. MCX offers options trading in gold and futures trading in non-ferrous metals,bullions,oil,natural gas,and agricultural commodities.
Susan Elaine Dudley is an American academic who served as Administrator of the Office of Information and Regulatory Affairs (OIRA),Office of Management and Budget in the administration of George W. Bush. As such,Dudley was the top regulatory official at the White House.
The "Enron loophole" exempts most over-the-counter energy trades and trading on electronic energy commodity markets from government regulation.
The State Reserves Bureau copper scandal refers to a loss of approximately US$150 million as a result of trading LME Copper futures contracts at the London Metal Exchange (LME) by rogue trader Liu Qibing,who was the chief trader for the Import and Export Department of the State Regulation Centre for Supply Reserves (SRCSR),the trading agency for the State Reserve Bureau (SRB) of China in 2005.
Jill E. Sommers was sworn in as a commissioner of the Commodity Futures Trading Commission on August 8,2007 to a term that expired April 13,2009. She was nominated on July 20,2009 by President Barack Obama to serve a five-year second term.,and confirmed by the United States Senate on October 8,2009.
The Dubai Gold &Commodities Exchange (DGCX) is a financial and commodity derivatives exchange located in Dubai,the United Arab Emirates. DGCX commenced trading in November 2005 as the first derivatives exchange in the Middle East and North Africa (MENA) region. The Exchange is owned by the Dubai Multi Commodities Centre (DMCC).
Live cattle is a type of futures contract that can be used to hedge and to speculate on fed cattle prices. Cattle producers,feedlot operators,and merchant exporters can hedge future selling prices for cattle through trading live cattle futures,and such trading is a common part of a producer's price risk management program. Conversely,meat packers,and merchant importers can hedge future buying prices for cattle. Producers and buyers of live cattle can also enter into production and marketing contracts for delivering live cattle in cash or spot markets that include futures prices as part of a reference price formula. Businesses that purchase beef as an input could also hedge beef price risk by purchasing live cattle futures contracts.
Robert R. Davis is an American economist and trade association executive. A longtime executive at the American Bankers Association and its predecessor,America's Community Bankers,Davis served for five and a half years as a member of the Commodity Futures Trading Commission.
