Pssst, Nobody's Looking
Energy Traders Avoid Scrutiny As Commodities Market Grows, Oversight Is Slight
By David Cho Washington Post Staff Writer Sunday, October 21, 2007; A01
One year ago, a 32-year-old trader at a giant hedge fund named Amaranth held huge sway over the price the country paid for natural gas. Trading on unregulated commodity exchanges, he made risky bets that led to the fund's collapse -- and, according to a congressional investigation, higher gas bills for homeowners.
But as another winter approaches, lawmakers and federal regulators have yet to set up a system to prevent another big fund from cornering a vital commodity market. Called by some insiders the Wild West of Wall Street, commodity trading is a world where many goods that are key to national security or public consumption, such as oil, pork bellies or uranium, are traded with almost no oversight.
. . . "No one could have imagined that you would have a [commodity] energy market develop the way it did," added James Newsome, chief ex…