The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Macaskill on markets: CFTC intervention raises reputation risks over Hovnanian default

An unusual move by a US regulator threatens to widen a conflict over potential manipu-lation of Hovnanian default swaps by Blackstone’s credit arm GSO.

As delegates to the annual general meeting of the International Swaps and Derivatives Association (ISDA) gathered in Miami on the evening of April 24, they had a surprise regulatory intervention in a trading dispute to digest.


Christopher Giancarlo,

The Commodity Futures Trading Commission (CFTC) announced that it is examining whether manufactured credit events designed to trigger default swaps constitute market manipulation, a few hours before ISDA delegates gathered at a reception by the pool in the Delano hotel in South Beach, and the implications of this action quickly became a main point of conversation.

“The statement came as a surprise – first because it was forceful, but also because the CFTC has not said much about the credit default swap (CDS) market before, but I think they will need to come out with more guidance than a press release,” said Fabien Carruzzo, a partner and head of the derivatives and structured product group at law firm Kramer Levin.

Opponents of Blackstone’s trading tactics designed to profit from default swaps it bought on homebuilding firm Hovnanian were understandably keen to frame the regulatory intervention as backing for their case.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree