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Bloomberg’s Legal Team Seeks an Injunction Relating to the CFTC’s Swaps Margin Rule

May 2, 2013

Today, Bloomberg’s legal team Eugene Scalia, partner at Gibson, Dunn & Crutcher, and Mario Cuomo, counsel at Willkie Farr & Gallagher LLP, filed a motion seeking preliminary injunction in the U.S. District Court of Columbia to prevent the Commodity Futures Trading Commission (CFTC) from implementing flawed regulation related to the clearing of swaps. The injunction comes on the heels of the lawsuit Bloomberg LP filed against the CFTC on April 17, 2013.

Scalia and Cuomo issued the following statement:

“Today, our client, Bloomberg LP, filed a motion for a preliminary injunction in the U.S. District Court for the District of Columbia, seeking the same relief that the U.S. Commodity Futures Trading Commission (CFTC) could have granted to prevent its arbitrary Rule 39. 13(g)(2)(ii) (“Margin Rule”) from disrupting the implementation of swap clearing by the broader market. Bloomberg is disappointed that its request for a stay of the Margin Rule, initially sought in a letter on March 11th and then again through a formal submission on April 24th, has not been acted upon by the CFTC.

“The CFTC still has the chance to reduce uncertainty, decrease systemic risk, increase transparency, and preserve market stability, by issuing a stay of its flawed Margin Rule. However, our client feels it is necessary to file this motion today in order to prevent the rule’s adverse effects on the broader market beginning June 10, 2013. The Margin Rule – in its current form – threatens to increase risk in the financial markets, decrease transparency, and render important swap investor protections irrelevant. Bloomberg believes the margin requirements for swaps and futures should be based on a sound empirical assessment of a products’ risk profile, not on the label of a product. Bloomberg LP remains committed to implementation of Title VII of Dodd-Frank.”

For more information on Bloomberg’s suit, read Bloomberg CEO and President Dan Doctoroff’s piece in the Huffington Post.