POTOMAC, Md., July 27 /PRNewswire-USNewswire/ -- Today Steve Milloy, publisher of JunkScience.com, released a letter to Securities and Exchange Commission Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler asking for an investigation into loopholes in the law which enable Goldman Sachs an unfair securities market advantage and a unique ability to manipulate commodities markets. It is Milloy's concern that Goldman Sachs may similarly exploit any future carbon market created by the cap and trade legislation moving through Congress. The letter may be read here: http://greenhellblog.files.wordpress.com/2009/07/seccftc-july-24-2009.pdf

Recent news reports have uncovered a securities market rule loophole that enables Goldman Sachs to see incoming market orders ahead of the public in order to "trade ahead" or "front-run" the market. Additionally, it has been revealed that Goldman Sachs received special - and essentially secret - permission from the CFTC to take larger positions in the commodities futures markets than otherwise permitted, which may have helped to cause the 2008 oil bubble. This permission was so secret that the CFTC felt it necessary to obtain Goldman's permission to release the details to Congress. Goldman Sachs is a major owner of the exchanges where carbon allowances would be traded and can also be expected to take significant proprietary positions in the carbon market. Since the first line of regulation in the securities and commodity markets is the self-regulatory organization that operates each particular market, is it reasonable to rely on Goldman to regulate itself?

Milloy said, "If Congress enacts carbon trading through a cap-and-trade scheme, look for Goldman Sachs to figure out how to game the market at our expense. When I was an SEC lawyer, we called this 'trading ahead' or 'front-running' and it was illegal. But apparently, Goldman Sachs and some other traders with powerful computers have obtained special permission to engage in so-called 'high-frequency trading' -- which can only be considered a euphemism for front-running. This is outrageous and it gives Goldman and the other frontrunners an unfair advantage in the market, it can only be called legalized cheating."

Milloy is the founder and publisher of JunkScience.com; a co-founder and portfolio manager of the Free Enterprise Action Fund (the first conservative/libertarian mutual fund); and a long-time columnist for FoxNews.com. He is a frequent advocate for free enterprise/free market principles and policies in conjunction with the Competitive Enterprise Institute and the National Center for Public Policy Research, both of which are supported by individuals, foundations and businesses.

Contact: Audrey Mullen at 703-548-1160

SOURCE JunkScience.com