Chastened by past demons, CFTC is quick to call out potential manipulation in credit derivatives

As the financial crisis revealed, pockets of unethical behavior by some devils in the mortgage-backed securities market ultimately boomeranged on average homeowners. In April, the regulator called out Blackstone's GSO Capital and Hovnanian Enterprises for what appeared to be a manufactured default and sweetheart deal. The agency's statement was clear in saying that manufactured credit events may constitute market manipulation and may severely damage the integrity of the credit default swap market.