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Lawmaker Wants Gambling Law Used Against Investments
SEATTLE, WASHINGTON --
A Washington state senator wants to apply state laws about gambling to Wall Street. Maria Cantwell says gaming laws could be used to regulate what she termed "casino capitalism."
Cantwell wants to give state attorney generals the power to regulate financial markets, a measure that seems clearly to violate the spirit and letter of the Commerce Clause. Using the popular conceit of the economic crisis as result of gambling behavior by investors, Cantwell wants to regulate derivatives markets that encourage speculative behavior.
Derivatives are seen as essentially betting on the market performance of primary investments. States have previously regulated gambling on stock market movement, going back to bans against betting on market trends at the turn of the 19th century.
"Las Vegas casinos were regulated but betting on Wall Street wasn't," says Maryland law professor Michael Greenberger.
Cantwell wants laws allowing state legal authorities to examine and regulate derivatives markets left unsupervised by Congress. Her backers say the securities industry has contacted her to negotiate changes in law in an effort to persuade her not to use the gambling statutes as a method of attack on investments.
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