The "Enron loophole" exempts most over-the-counter

Over-the-counter (finance)

Within the derivatives markets, many products are traded through exchanges. An exchange has the benefit of facilitating liquidity and also mitigates all credit risk concerning the default of a member of the exchange. Products traded on the exchange must be well standardised to transparent trading....

 energy trades and trading on electronic energy commodity markets from government regulation.

The "loophole" was enacted in sections § 2(h) and (g) of the Commodity Futures Modernization Act of 2000

Commodity Futures Modernization Act of 2000

The Commodity Futures Modernization Act of 2000 is United States federal legislation that officially ensured the deregulation of financial products known as over-the-counter derivatives. It was signed into law on December 21, 2000 by President Bill Clinton...

, signed by U.S. president Bill Clinton

Bill Clinton

William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...

 on December 21, 2000. It allowed for the creation, for U.S. exchanges, of a new kind of derivative security, the single-stock future, which had been prohibited since 1982 under the Shad-Johnson Accord, a jurisdictional pact between John S. R. Shad, then chairman of the U.S. Securities and Exchange Commission, and Phil Johnson, then chairman of the Commodity Futures Trading Commission

Commodity Futures Trading Commission

The U.S. Commodity Futures Trading Commission is an independent agency of the United States government that regulates futures and option markets....

.

In September 2007, Senator Carl Levin

Carl Levin

Carl Milton Levin is a Jewish-American United States Senator from Michigan, serving since 1979. He is the Chairman of the Senate Committee on Armed Services. He is a member of the Democratic Party....

 (D-MI) introduced Senate Bill S. 2058 specifically to close the "Enron Loophole". This bill was later attached to H.R. 6124, the Food, Conservation, and Energy Act of 2008

Food, Conservation, and Energy Act of 2008

The Food, Conservation, and Energy Act of 2008 was a $288 billion, five-year agricultural policy bill that was passed into law by the United States Congress on June 18, 2008. The bill was a continuation of the 2002 Farm Bill. It continues the United States' long history of agricultural subsidy as...

, also known as "The 2008 Farm Bill". President George W. Bush

George W. Bush

George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....

 vetoed the bill, but was overridden by both the House and Senate, and on June 18, 2008 the bill was enacted into law.

Wendy Gramm

Wendy Lee Gramm

Wendy Lee Gramm is an American economist and a distinguished senior scholar at George Mason University's Mercatus Center, a free-market think tank based in Washington D.C. She is also the wife of former United States Senator Phil Gramm...

, Senator Phil Gramm's wife, coincidentally was the former chairman of the Commodity Futures Trading Commission. After leaving the CFTC, she took a seat on Enron's board of directors.

On June 22, 2008, then U.S. Senator Barack Obama

Barack Obama

Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...

blamed the "Enron loophole" for allowing speculators to run up the cost of fuel by operating outside federal regulation.