Administrative Judge’s Bias Accusation Against Colleague Highlights CFTC Problems
An administrative law judge’s resignation letter has spurred a newspaper investigation into the investor complaint process at the Commodity Futures Trading Commission.
The Washington Post found “a weak and troubled system where small investors get tripped up on technicalities, legal standards are moving targets and agency leaders have cried foul on what they see as issues of basic fairness.”
The farewell letter by the judge, George Painter, said his colleague Bruce Levine vowed some 20 years ago that he would never rule in favor of a complainant and he has largely fulfilled the pledge.
Painter is not alone in raising concerns about Levine’s work, the Post found. CFTC commissioners “have repeatedly overruled Levine’s decisions, accusing the judge of abusing his discretion,” the story says. Since 2008, Levine has ruled just once in favor of an investor, awarding damages of more than $52,000 after the accused did not attend the hearing.
Painter, too, has been the subject of complaints. In one 2008 case the CFTC found that Painter was “was unusually acrimonious and intemperate.” In June, the 83-year-old judge was diagnosed with “probable Alzheimer’s type dementia with behavioral disturbance,” according to a story last month in the Wall Street Journal.
Investors are shunning the CFTC resolution process, partly because they have lost faith in it. The law permits aggrieved commodities investors a choice: They can bring complaints in court, through arbitration or with the CFTC. Few are choosing the latter, bringing the CFTC resolution process to “the brink of irrelevance,” the story says.
