Long dismissed as a lackadaisical regulator, the commission is suddenly on the move. Indeed, it is busier than ever: It opened a record 419 investigations over the last year, into things as diverse as small-time Ponzi schemes and claims of market manipulation.

It is a remarkable turnabout for the agency, which not long ago seemed on the brink of extinction. Its chairman, Gary Gensler, a former Goldman Sachs executive, has surprised some of his former Wall Street colleagues by flexing his agency’s muscles. He is rushing to expand the CFTC’s power now that the agency is poised to take on a new role in overseeing the vast market for derivatives that were traded off formal exchanges in the so-called over-the-counter market. He recently hired a former United States prosecutor as his new head of enforcement.

The CFTC, for instance, has about 200 lawyers in its enforcement division, while the SEC. has more than 1,200. The agency is certainly talking tougher. Last week, one of its commissioners, Bart Chilton, urged the agency to strengthen its two-year investigation into suspected manipulation in silver trading.
“I believe that there have been repeated attempts to influence prices in the silver markets,” Mr. Chilton said at a hearing last month in Washington. “There have been fraudulent efforts to persuade and deviously control that price.”

A day after Mr. Chilton made his comments, two silver traders filed separate lawsuits in Manhattan federal court against two banking giants, JPMorgan Chase and HSBC Holdings. They accused the banks of conspiring to suppress prices of silver futures on the Commodity Exchange division of the New York Mercantile Exchange, beginning in the spring of 2008. In the relatively thinly traded silver futures markets, a handful of large banks and financial firms dominate trading. The lawsuits say that JPMorgan and HSBC used their dominant positions in the market to manipulate silver prices.

Starting last spring as the two banks cut back on their activities in the silver market, the prices of silver futures increased about 50 per cent “even though no fundamental changes in supply or demand for silver, including industrial demand, have occurred during this time period,” one lawsuit states.

Given the uncertain outlook for the economy, many investors have sought safety in precious metals like gold. Silver, copper, wheat and oil have also gained amid concern that new efforts to spur growth — including the $600 billion in new Treasury bond purchases announced by the Federal Reserve on Wednesday — could eventually ignite inflation. The CFTC filed 57 enforcement actions in the 12 months ended in September, 14 per cent more than in the period a year earlier. A senior enforcement official said the commission was working more closely with other law enforcement agencies. Its success in securing convictions has shown that commodities fraud is a crime, encouraging other investors to come forward with their complaints, he said.

Now the commission is expanding under Mr Gensler. Its reach has recently grown to overseeing foreign exchange dealers, and it will share a large part of the burden of the new financial regulation, including new responsibilities for the swaps market. Specifically, the Dodd-Frank Act gives the agency new authority to fight manipulation in the swaps market, as well as new powers against disruptive practices in the swaps and futures markets.

Mr. Gensler, who was one of the strongest proponents for moving over-the-counter derivatives onto public exchanges, estimates that his agency will need an additional 400 employees, taking staff levels from 688 now to 1,100 over the next two years. “Markets work best when they are transparent and they have an effective cop on the beat,” he said.