Better Markets filed a friend-of-the-court brief backing the Capital Markets Alliance’s lawsuit challenging the CFTC’s approval of perpetual derivatives on individual U.S. stocks. The group argues that, because the products have no fixed delivery date, they are security-based swaps subject to SEC oversight, including registration and trading on regulated national securities exchanges.
Better Markets warns that roughly six-to-one leverage and automatic liquidations could quickly wipe out retail investors’ portfolios. The alliance seeks to have the approvals overturned; the SEC has filed a brief supporting the CFTC.
