The Commodity Futures Trading Commission said on Friday that it has sued 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 on 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, the commission said.
Chairman Michael S. Selig said event contracts have traded openly in Louisiana for years in compliance with the Commodity Exchange Act and CFTC regulations, and called the state’s eleventh-hour emergency lawsuit naked lawfare and a cynical political stunt. The commission said its lawsuit seeks to maintain the status quo while the federal courts decide the issue, and that Louisiana is the twelfth state it has sued to defend its exclusive jurisdiction over derivatives markets under the Commodity Exchange Act.