Pressure on U.S. futures regulators to launch an official probe of the aluminum market mounted on Tuesday, when the head of the Senate Agriculture Committee asked the Commodity Futures Trading Commission to review alleged manipulation.
Chairwoman Debbie Stabenow noted that in congressional testimony last week, buyers of aluminum alleged that the current market price was being skewed by those who own and profit from the storage of metal at warehouses.
"I am writing to encourage you to further review this issue and clarify the role and responsibility of the Commodity Futures Trading Commission to address the situation," Stabenow wrote to CFTC Chairman Gary Gensler.
Last week, the CFTC put Wall Street banks and other big traders on notice for a possible investigation of their metals warehousing businesses, following years of complaints about inflated prices.
The request to firms to preserve relevant documents from the past three years appeared to stop short of a formal CFTC probe, one of the sources to receive the letters told Reuters.
Stabenow asked Gensler to clarify aspects of the CFTC's rule regarding metals warehouses located in the United States, whether it has a direct oversight role over the London Metals Exchange, and whether certain actions in the control of physical supplies might violate the U.S. Commodities Exchange Act.
"If you have doubts about the authority of the agency to ensure markets are safe for trading and free from fraud or manipulation, this Committee needs to know," Stabenow said.
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