Commodity Futures Trading Commission (CFTC) backpedals to escape judicial scrutiny? Analysis
Washington, D.C., adapted from Newswire.com — Aristotle International, a service provider for the leading prediction market, PredictIt, is responding to the latest actions by the Commodity Futures Trading Commission (CFTC) against the site.
The Commission issued a letter on Aug. 4, 2022, directing PredictIt to shut down. This week, the Commission withdrew its previous letter, which was challenged as illegal in pending legal proceedings, and issued an update.
“This action is an acknowledgment that they haven’t treated PredictIt or its traders and education partners in a fair or just way so they’re trying to go back and change history,” said David Mason, Aristotle General Counsel and former Federal Election Commission (FEC) Chairman.
The new letter was sent to PredictIt sponsor, Victoria University of Wellington (New Zealand), withdrawing its Aug. 4, 2022, letter and reissuing a preliminary shutdown decision.
At effectively the same time, the CFTC informed Aristotle International that it intends to use this letter to attempt to prematurely terminate pending legal proceedings in the U.S. Court of Appeals for the Fifth Circuit, pursuant to a judicial complaint that the company along with more than a dozen PredictIt traders, educators and others have filed challenging the Aug. 4 shutdown order.
Note: An early February news story for the Courthouse News Service reported the CFTC had tried to “shutter” PredictIt, which has developed a market bringing in “millions in wagers each year on political bets such as who will win the 2024 U.S. presidential election.”
The new letter from CFTC officials comes three weeks after a panel of Fifth Circuit Appeals court asked CFTC’s attorney a series of skeptical questions about the shutdown order.
One Judge described the CFTC’s actions as a “license to bully.”
The oral argument of that hearing can be listened to here:
https://www.ca5.uscourts.gov/OralArgRecordings/22/22-51124_2-8-2023.mp3
This story originated in a release from Newswire.com, a worldwide news service that provides press releases to news organizations, including CapitolBeatOK.com.
Aristotle International sent out the following statement in response to the developments:
“The CFTC’s letter on PredictIt … is an acknowledgment that its action last August to withdraw the no-action letter was illegal because it lacked basic procedural fairness and transparency. While this belated admission of wrongdoing is welcome, the Commission’s new letter is a desperate attempt to escape the consequences of its prior ill-considered action by avoiding judicial review and the ruling we have requested requiring the Commission to treat those affected by its actions fairly.
“We reject the CFTC’s characterization of the facts. In particular, we note that we have been transparent with and responsive to the Commission about all the matters addressed in their letter for more than eight years. We are disappointed that the CFTC continues to insist that traders and others impacted by its regulatory decisions have no voice in decisions affecting them. We plan to continue to fight this prejudiced attempt to shut down this useful market,” David Mason said.
Press inquiries should be directed to press@aristotle.com.
The original version of the Newswire press release can be studied here:
https://www.newswire.com/news/cftc-attempts-backpedal-to-escape-judicial-scrutiny-21972615
Note: Pat McGuigan — founder and publisher of CapitolBeatOK.com, an independent, non-partisan and locally-managed news service based in Oklahoma City — prepared this story for posting, adding information from last month’s report by the Courthouse News Service.