Megan McCarty Carino

So when it comes to the futures markets for commodities, you

That wasn't a consideration.

And also, there was kind of a historical belief that actually the more informed the traders are, the better, because then you get better price accuracy.

A lot of the folks who would be trading on commodities futures would be people with some insider information.

You think about the sort of hedging function of a farmer that sees that their crops are not maybe doing that well.

And so, you know, they they sort of hedge against their own crops in the commodities market.

And so it was sort of seen as like, yeah, OK, we're going to have inside information in this market.

It's not something that we need to be worried about.

So it was the Dodd-Frank Act in the wake of the financial crisis that did eventually ban insider trading on commodities.

And what had happened in sort of the 90s and the 2000s was an explosion of

exotic financial instruments.

Specifically, you may remember credit default swaps, which were pretty central to the financial crisis.

And these swaps are sort of something that would be covered under commodities futures, but were sort of outside.

There were trillions of dollars of these things that the government basically had no visibility of.

And so I think there was a

There was an understandable desire to sort of bring a bit more order to the swaps market.

And so the Dodd-Frank Act brought about a number of different reforms to how commodities, futures, and derivatives markets are regulated.

Insider trading law...

for commodities markets was really just sort of borrowed from the securities markets.

And so there's this kind of idea of misappropriation of material non-public information.