JUDGES REJECT CFTC POWER GRAB IN KRAFT CASE
The Seventh Circuit just handed down a decision that could redraw lines of federal oversight for commodity markets. In a rare writ of mandamus, judges blocked the CFTC from forcing Kraft to turn over internal documents without a proper subpoena. The ruling signals that even regulators face limits when chasing evidence in potential manipulation cases.
The trouble began when the CFTC launched an investigation into whether Kraft Foods had cornered the wheat market. Regulators claimed they needed broad access to company emails and memos to prove whether executives had talked about squeezing wheat futures prices. When Kraft refused to hand over the documents voluntarily, the CFTC tried to bypass traditional subpoena procedures by asking the district court to issue an order compelling production. The court refused, and the CFTC sought emergency relief from the appeals court.
Judges ruled that the CFTC lacked authority to skip the subpoena process and instead use a writ of mandamus to extract data. They found that the agency had plenty of statutory tools to obtain information through official subpoenas, yet chose a shortcut that would er