United States Commodity Futures Trading Commission v. Hunter Wise Commodities LLC et al

Filing 281

ORDER granting in part and denying in part 149 Motion for Summary Judgment; denying 176 Motion for Summary Judgment. see order for details Signed by Judge Donald M. Middlebrooks on 2/19/2014. (sw)

UNI
TED STATES DI
STRI COURT
CT
SO UTH ERN DI
STRICT OF FLORI
DA
Cas No. I 8I - V- I
e : Z- 3II CI M DDLEBROOK SY M NNON
UNI
TED STATES COM M ODI FUTURES
TY
TRADI COM M I ON ,
NG
SSI
Pli tf ,
a n if
HUNTER W I COM M ODI ES,
SE
TI LLC,e al,
t .
Def nda s
e nt .
/

ORDER ON THE PARTI M OTI
ES'
ONS FOR SUM M ARY JUDGM ENT

THI CAUSE c
S
omesbe or t Cour upon M oton byPl i ifUnie St t sCom modiy
f e he
t
i
antf
td ae
t

Fuu e Trd n Co sin(t
trs a i g mmiso C
CFTC' f rS mmayJ d me t( 1 )a dCo trM oi b
' o u r u g n DE 49 n une - t y
)
on

Dee a t Haod Ed r M a t , J . (Ma t ' a d F e J g r (l g r' (olciey,
fnd ns r l wad ri r $ ri ' n rd a e ç a e' c le tv l
n
i n)
l
)
ç fn a t J g r a d M atn' f r S mmay J d me t ( 1 6)1 Th CFTC fld is
i e d ns a e n
De
ri ' o u r u g n DE 7 .
l
e
ie t
Co oldae Repl i Suppor ofisM oton f Sum mar J
ns i t d
yn
t t
i or
y udgmentand Re pons t V ari a
s e o tn nd

J g rs u trM oinf r mmayJ d me t ( 1 5; 1 5 .De e d n s a e a dM a t
a e' Co n e- to o Su r u g n . DE 8 DE 9 )2 fn a t J g r n ri
n
fldt Re yt terCo ne - to f rS mma yJ d me .( 1 6 .lh v r ve dt e
ie he pl o h i u trMo in o u r u g nt DE 9 ) a e e iwe h

l De e nt J e a M a tn i l d isRes et t CFTC' M oton f Summar
f nda s ag r nd ri ncude t
pons o he
S i or
y

J d me tnt erCo n e- oi nfrS mmayJ dg n .( 1 ) F rhe , fn a t J g r
u g n i h i u trM to o u r u me t DE 75 . u t r Dee d ns a e
a M a tn s
nd ri oughtcl fc ton whehe isCount rM o i f Summ a y J
mii a i
t rt
e - ton or
r udgmen wa fl
t s ied
tmey.lde m Def nda sJ ge and M a tn tm ey fl d,
i l
e
e nt a r
ri i l ie
2 Def nt J mesBur
enda s a
bagea Fr nk Ga no fl a Re pons i Opposton t t CFTC'
nd a
udi ied
s
en
ii o he
S

M oinf SummayJ me .( 1 2) TheCFTC andDefnda sBur gea Ga no
to or
r udg nt DE 7 .
e nt ba nd udi
r s v dtercamsa , nFe r ay 5 2 4,h Co r e tr daCo e t d r ( 2 4 .
e ole h i li nd o b u r , 01 t e u t nee
ns n Or e. DE 5 )

The ef e, heCour s lno a e st cli sr ie by De e
r or t
t hal t ddr s he am as d
f ndant Bur ge a Ga noi
s ba nd udi n

t i Re pons .
he r s
e

Pa t s rs e tv S ae ns o M aeilFa t( 1 3;DE 1 5 1,c repo dn e iis
ri ' e p cie ttme t f tra c DE 5
e
7 - ) o rs n ig xhbt,
d p sto ,a d a fd vt,( 1 0, 1 4 DE 1 7 9 ) a d t r c r a d Ia oh r s
e o iins n fi a is DE 5 DE 8 ,
8 - 4 , n he e o d n m te wie
a s i t pr mies
dvied n he e s .

1
.

STATUTORY BACKGROUND

On De e e 5 2 2 t eCFTC GldteCo li t DE 1 i t isa ta to , le i g
c mb r , 01 ,h
e h mpan ( ) n he n tn cin alg n
t ree Co sag ns De e nt 3f rvi a i o s ve als ci oft Comm odiy Exc
hit n unt ai t f nda s o oltons f e r e tons he
t
hange

Ac , u L. . 4 7 , 9S a. 4 ( 9 6 , sa n e b t Do d- a kW alSr e Reo m
t P b. No 7 - 65 4 tt 1 91 1 3 )a me d d y he d Frn
l te t f r
a Co s me P oe to Ac.Pu L. 1 - 0 ,1 4S a . 3 6( 01 )(Do d F n k'. S ci n
nd n u r r tcin t b. 1 12 3 2 tt 1 7 2 0 é d - r n ' 4 e to
t
)

7 o t Do d- n k Ac e p nd d te so e o te CF Sj rs ito t i ld fn n e
42 f he d Frn t x a e h c p f h TC' u id ci n o ncu e i a c d
c
omm odiyta a tonswihc um e s gr ntngt CFTC t powe a a ho iyt e u et t
t r ns c i
t ons r , a i he
he
r nd ut rt o ns r ha

ta s ci n iv l n c mmo iis wee t b e e ue o a e h n e s be tng s c
r n a to s n ovig o dte r o e x c td n n xc a g , u jci u h
3 Forpur e oft sOr r t fnda s'c itoft Entt Dee t ( trW ie
pos s hi de,i e nt' onss he iy fndans Hune s
De
Comm odii s LLC,Hun e W ieSe vce ,
te ,
t r s r i s LLC,Hunt rW ie Cr di,LLC,
e s e t
Hunt W ie
er s
Tr di LLC,C. Hopki Fi ncal LLC, r As e Le ngGr LLC,Blcksone
a ng,
D.
ns na i ,
Ha d s t ndi
oup,
a t

M easGr u LLC, wb i g Ala e l c, ndUntdStt sCa ia Tr s,
tl o p,
Ne rd e l nc ,n .a
i
ie ae pt l u tLLC)a wel s
s la
i vi ualDe e nt Da d A. oor Cha wi k Hopki ,Ba i Kes r J m Ki Ha ol
ndi d
f nda s vi M e, de c
ns rs e , ol ng, r d
Edwa d M a tn J ,a Fr d J ge .Asno e pr vi l s s pr no e2, heLl ydsDef nda s
r ri r nd e a r
t d e ousy, ee u a t t
o
e nt ,
whih c itofLl dsComm odiis LLC,Ll
c onss
oy
te ,
oydsComm odiisCr di Compa LLC,Ll
te e t
ny,
oyds
Se vies LLC,a De e nt Bur e a Ga no, e ted t cli ag ns t a t i
rc ,
nd f nda s bag nd udi s tl he a ms ai t hem nd her
c
onduc wilnotber e d i t sOr . Forpu pos oft sor er t ç-untrW ie
t l
eviwe n hi der
r es hi d , he tl e s
l
Defnda s'ncl Hunt W ie Com modii ,LLC,
e nt'i ude
er s
tes
Hunt rW ie Se vies LLC,Hunt rW i e
e s r c ,
e s
Cr t LLC,Hunt rW ie Tr di LLC,a De e t J era M a tn. I D.Ho ns
edi,
e s a ng,
nd f ndan s ag nd ri The I
C.
pki
D e e nt' c itofC. Hopki Fi nc a ,
fnda s' onss
D.
ns na i l LLC,Ha d As e Le n Gr
r s t ndi g oup,
LLC,
and
De e ntHopki . l ac t De e t 'i udeBl c t a De e ntKes r The
f nda
ns The i ksone f ndan s' ncl
Bl
a ksone nd f nda
e.
i e i De e nt 'c itofNe i and De enda Ki TheC SCT Def nt'
f wbrdge f nda s' ons s
N
wbrdge
f nt ng.
f
U
enda s'
i udeUSCT a De t
ncl
nd f ndantM oor ç a e De e nt' r f r t C. Hopki , f nt
e. ' l r f nda s' e e s o D,
De
ns De enda
H opki ,Ha d A s etLe ngsBl cks one D e e ntK e er N ewbr dge D e e ntKi
ns r
s
ndi
a t , f nda
s ,
i , f nda
ng,
USCT,a De e
nd f ndan M oor
t
e.

4 Dodd- an be a eefeci on J y 1 2011a gr nt d t CFTC ne a hort ove
Fr k c m f tve
ul 6,
nd a e he
w ut iy r
ce ti l ve a
ran e r ged,ma gi d,orfna d c modiy ta a tonswih r t i cusome s i l ng
r ne
i nce om
t r ns c i
t e a l t r , ncudi
auhort t pr bi fau i con tonwih s ta a to i i e sa ecomme c
t iy o ohi t r d n neci
t uch r ns c i ns n nt rt t
r e.
2

ta scinst tea t-r u p o iin o S cins4 a a d 4 o t Co dt Ex h n eAc
rn a to o h nifa d r vso s f e to () n b f he mmo i c a g t
y

(Ac'o i '. S e i al,heDo d F a kAc a e Se to 2 c( )D) S e7 U.. j
$ t' r : )5 p csc l t
i
CEA'
y
d - r n t dd d cin ()2 ( . e
SC.
2 c( )D).
()2 ( )

S cin2 c ( ( p o ie ,nrlv n p r:
e to ( )2)D) r vd s i ee a t a t
( Reai c
D) t l ommodiytans tons
t r aci

()Applc bi t
I
ia l y
i
Ex e a p o ie i ca s (i,ti s b a a rph s ala py t a y
c pt s r vd d n lu e i) h s u p rg a h l p l o n
a e m e ,c r ct ortans to i a c
gr e nt onta , r aci n n ny omm odiy t ti t ha s

()
I

e trdit wih, ro fr d(v ni no e trd it wi l a
nee no t o fee e e f t n ee no t s
h
pe s t ti notan ei bl c r tpa tci nt o ei bl
r on ha s
lgi e ontac ri pa 6 r lgi e
comme cile iy;a
r a ntt nd

(1 e tr d it o o fr d (v n i n te tr d it ) o a
1 ) ne e no, r fee e e f o ne e n o , n

l r ed or m a gi
eve ag
r ned bass or fna e by t ofe or t
i,
i nc d
he f r , he
c e pa t or a pe s a tng i c e t wih t ofer or
ount r ry,
r on c i n onc r t he f or
co e a t on a smia ba i
unt m ry
i l r ss.

(i Exc i
i) eptons
Thi s r r h s l nota y t s ubpa ag ap ha l
ppl o
5 TheCommodiyExc ngeAc S sar me a saut t ts r st cr a pur eof
t
ha
t f e di l t t e ha e ve he ucil pos
i
pr t c i t i e i vi li sor- who ma know ltl a
o e tng he nnoc nt ndi dua nve t
y
ite boutt i rc ci a
he nti a es nd
c
ompl te oft c
exiis he ommodii sma ke - fom bei mil orde ei ' CFTC v R.
te r t r
ng sed
c ved.'
. J

Fiz r d( Co.I .31 F.3d 1 21 1 ( 1hCi.
tgeal f , nc, 0
3 , 329 1 t r 2002) I taly,t o yc
. nii l he nl ommodii
tes
r gult d by Congr s we e c ran gr i f t e ta a i pur ua t t Gr n Fut esAc .
e ae
e s r e ti a n u ur s r ns ctons s nt o he ai
ur
t
I 1
n 936,Cong es r me t Ac t bet Comm odiy Exc angeAc ,a e
r s ena d he t o he
t
h
t nd xpandedis
t
cove a t i l e a tona a i ulur c
r ge o ncud ddii l grc t al omm odii .Si e t t Ac ha be a nde
tes nc hen, he t s en me d
s ver ltmes l 1
e a i . n 974,t CFTC wa esa ihe by t Comm o t Fut esTr di
he
s tbls d he
diy ur
a ng
Co mison Ac ,Pub. No. 463, St t 1
m si
t
L. 9388 a . 389.TheCFTC i c r d by Co r swih
s ha ge
ng es t
a nit rngand e or i t Comm odiyExc ngeAc a t Comm ison Reg a i
dmi se i
nf c ng he
t
ha
t nd he
si
ultons

prmul tdt e r See1 C. R.jj 1e s q.
o gae herunde .
7 F.
te
6TheActdefne a elgi ec rc pa tcpa Ci ',i r e pa ta a i vi lwho
i s n i bl onta t rii nt ECP' n elvant r, s n ndi dua
)
hasa
moun si sedon adic eton ybass t a e t ofwhih e e $1 m ilon,or$5
t nve t
s r i ar i ,he ggr ga e
c xce ds 0 li
milon i t i vi e e si o t ta aci i or rt m a
li f he ndi dual nt r nt he r ns ton n de o naget rs a s it d wih a
he ik s oc ae t n
a s owne orlabiiy i r e orr as bl lkey t beowne ori ure by t i vi l
s et
d i lt ncu r d, e ona y i l o
d nc r d, he ndi dua .

7U. C.j1 ( )xi.
S. a 18( )

()
I

a a re n , o ta to ta a to d srb d i paa r p ( )o
n g e me t c n rc r rnscin e ci e n rg a h 1 r
s b aa rp s( ,B) o ( ,n l dn a ya re n , o rc, r
u p r g a h A) ( , r C) icu ig n g e me tc nta to
ta s cins e i al e cu e fo s bp rg a h( ,B)o ( .
rn a to p cfc ly x l d d r m u aa rp A) ( , r C)

(1 a s urt
1) ny ec iy;
(1) ac rctofs l t t11
onta
ae ha

( a r s lsi a t a d l e ywihn2 d y o s c oh rln e
a ) e u t n cu l ei r t i 8 a s r u h te o g r
v
pe i as t Comm iso m a de e mi by nle or
rod
he
sin
y t r ne
l
r gultonbas upont t pia c
e ai
ed
he y c l omm e cilpr c iei c h
r a a tc n as
ors tma kesf t c m modiy i ve o
po r t or he o
t nvol d; r

(
bb) ce tsa e f re beo l aint d lv rb t e as l r
rae n n o c a l bi to o ei e ewe n el
g
e
a a bu r t t ha t a lt t de i a a ce t
nd
ye ha ve he biiy o lver nd c p
dei r r s c i l i cor c i wiht lneofbusn s
lve y, e pe tvey,n me ton t he i
i es

o t es le a db y r.
f h elr n u e ll
7U. C. 2 c( )D)7Thi scinf rh rsae ta, p rfo tee c p in lse a o e te e
S. j ()2 ( . s e to u te tts h ta a tr m h x e to s itd b v ,h s

tp so ta s cin aes be tt Se to s4 a , , ( , n 4 9o teAc E si t ea r e n ,
y e f rn a to s r u jc o cin ()8 4b) a d b f h t l f h g e me t
a
7 I f l w st tai ea lc t m e 'i ape s t ti no a ECP, . ,a i vi lwho does
t olo ha ' t i uso r' s r on ha s t n
r
ie. n ndi dua

n tme ttesa d r sa s t o t i 7U. C. 1 ( 8 ( ( i.l t ei tn matr teCF
o e h tn ad s e f rh n S. j a 1 )A)x ) n h nsa t te,h TC
cai t De e nt 'r ai cusome sdi nothavet e $5 milon ormor i s e on a
l m hat f nda s ct l t r d
h
li
e nve t d

dicei
srtonmy ba i t ti rquie t bea ECP.( eDE 1 a 5n. .
ss ha s e rd o n
Se
49 t 2)
8 7U. C. 6 a , r vd s i rlv n p r:
S. j () p o ie ,n ee a t a t
( Ret iton onf ur stadi
a) srci
ut e r ng

(l s al eu lwf f ra yp ro t fe t e trit t e tri o t
lt h lb na ul o n es n oo fr o ne no,o n e nt,o
e c e t co im t e uton of ort c
xe ut , o nfr he xec i
, o onduc a of e orbusnes
t ny fc
i s
a
nywhe e i t Unie St e ,ist ni o i sorpos es i ,f t e pur eof
r n he t d ats t e t re
s sons or h
pos
s iii orac e i an or rf ,orot r s de lng i a ta a ton i or
olc tng
c ptng y de or
he wie a i n, ny r ns c i n,
ic
n onneci wih,acon r c f rt pur s ors l ofac modiy f rf ur
ton t
ta t o he cha e ae
om
t o ut e

d lv r (t e t a ac nrc wh c i ma eo o s be tt t er lso ab ad
eiey oh r h n o ta t ih s d n r u j c o h ue f o r
oftade e hange ormar tl a e outi t Unie St t s ist nioresor
r , xc
,
ke oc t d sde he t d a e , t e t i

p se so )u ls o s sins ne s -

( )s c ta s cini c n u tdo o s j c t t er lso ab ado ta e
1 u h r n a to s o d ce n r ube to h ue f o r f rd

w hi ha be n des g ed o r gi t r b t Com m i s on a a contac m a ke
ch s e
i nat r e s e ed y he
si s
r t r t

ordei tvestans tone cutonf iiyf s hc
rvai r aci xe i aclt or uc ommodiy;(ndl
t a
( s hc r c i e cue orc ummaedbyort oug aconrc makel)
2) uc onta t s xe td ons
t
hr h
ta t r t.
9 7U. C.j6b()2) pr de ,i rlva pa t
S.
a( , ovi s n ee nt r:
4

c r c ,orta a ton wa a con r c ofs l ofa co modiy f f ur de i r ' 7 U. C.j
onta t r ns c i
s
ta t ae
m
t or ut e lve y.
'
S.

2( ( ( (i)
c)2)D)ii.
Fu te, cin75 o teDo - a kAc a nd dSe to 6 c o t eAc ( U. C. j
rh r Se to 3 f h ddFrn t me e ci n () f h t 7 S. j

9 l )0 ob o d nt CFTC' a t-ru u idcina s to ti Co si nRe uain 1 0.,
, 5 1t r a e he
S nifa dj rs ito s e u n mmiso g lto 8 1
whi h pr bis t Snt ntona o r c es ' us of de ptve or m a pultve pr ci es i
c ohi t he t e i l r e kl s' e
i
ce i
ni a i
a tc n

( Unl ulactons
a) awf
i
l s l beunl wf t ha l
a ul

( f a pes i ori co ci wiha or rt ma ,ort ma ngof
2) or ny ron,n n nne ton t ny de o ke he ki ,
a c r c ofs eofa c modiy f f ur de i r ors
ny onta t al
ny om
t or ut e lve y, wap,t ti m a
ha s de,
ort be ma f oron be l of o wih, ny ot rpe s o he t n on or
o
de, or
ha f , r t a
he r on, t r ha

s be t ot er lso ad sg ae c n rc mak t
u j c t h ue f e in td o ta t r e(
A) t c a o d fa do atmp t c e t rd fa dt eo h rp ro ;
o he t r er u r te t o h a o e ru h t e es n
(
B)

wilulyt ma orc us t bema t t ot rpes a fle
lf l o ke a e o
de o he he ron ny as
r por orsa e ntorwiluly t e e orca et be e e e f
e t t t me
lf l o nt r
us o
nt r d or

t eo h rp ro a yfler c r ;(r
h t e es n n as e o d o j

(
C) wilul t d c i eo atmp t d c i eteohe pes nb a yme n
lf l o e ev r te t o e ev h t r ro y n a s
y
wha s ri r a d t a o de orc r c o t diposton or
toeve n eg r o ny r r onta t r he s ii
e c i ofa o de orc r c ,o i r ga d t a a tofa ne
xe uton ny r r onta t r n e r o ny c
ge y
peror d, t r pec t a or rorc r c f or i t ca e of
f me wih es t o ny de
onta t or , n he s

paa rp ( ) wi t eohe p ro gj
r ga h 2 , t h t r es n .
h
' Se to 6 c o t CEA i c d fe i b t 7U. C. 9 a d7U. C. 1 . U. C. 9 1,
0 cin () f he
s o iid n o h S. j n
S. j 5 7 S. j ( )
be a eefec i on Augus 1 2011a pr des i r l ntpar;
cm
f tve
t 5,
nd ovi , n eeva
t
l s l beunlwf f a pe s die ty ori r c l t us orempl y,
t ha l
a ul or ny r on, r c l
ndie ty, o e
o or
a tm ptt us ore oy, n c
te
o e mpl i onne ton wih a s p,o a c r c ofs l ofa
ci
t ny wa r onta t ae ny

c mmo t i itrtt c mme c , rf rf tr d lv r o o s b e tot er ls
o di n n e sae o re o o uu e ei ey n r u jc t h ue
y
ofa r git r e iy,a ma pultveordee ptvedevi orc rva ,i
ny e se ed ntt ny ni a i
e i
ce onti nce n
c r ve i ofs h r esa r ultonsa t Com mis o s lpr m ul t
onta nton uc ul nd eg a i
s he
s i n hal o gae

b n tltrt a 1y a a trJ l 21 2 0(
y o ae h n e r fe uy , 01 .
)
5

' ol c i wiha s p, c r c ofs eofa comm odiyi i e sa ec me c orc r ct
ç me ton t ny wa or onta t al
c
ny
t n nt r tt om r e, onta

f rft r d l r o o s b e t oter lso a yrgsee e tt 'S e1 C. R. 1 0..
o uu e ei y n r u j c t h ue f n e itrd n i ' e 7 F. j 8 1
ve
y.
I.
I

FACTUAL BACK GROUND

OnDe e e 5 2 2 t eCF sldaM o inf r ti n Ij n to ( 4 se i g
c mb r , 01 ,h TC e
to o Pr l my nu cin DE ) e k n
mi
t e j i te De e d n sfo o frn a d e e ui ilg lrti c mmo iyta s cin . On
o non h fn a t r m fei g n x c tng le a eal o dt rn a to s
F b u r 2 , 01 , fe teCo r h l ah ai o t eM oi nf r r l n l Ij n to t eCo r
e r ay 2 2 3 a trh u t ed e rng n h to o P ei ay nu cin,h u t
mi
is a Or rTe aiyAppoitn Spe a Comort M onior ( 77) TheCour is d
sued n de mporrl
nig cil
ae
t . DE .
tsue

a Or e o Plitf Mo inf r ei n r Ij n to ( 7 ) nFe r a y2 , 01 sn i gt a
n d r n an ips to o Prlmi ay n u cin DE 8 o b u r 5 2 3 d n h t
t CFTC i e tte t ap ei n r ij n to a do h re utber l f swel s e fimigt e
he
s n ild o r l ay nu cin n t e q ia l ei a la r afr n h
mi
e
Spe a M oniorsa hort a i r a e t t Entt Def nda s Seei a 33cil
t ' ut iy s t elt s o he iy e nt .
d. t 37.

TheCFTC ale t tDe e nt e ag i afa ents he ewher t y cai t s l
lges ha f nda s ng ed n r udul c m
e he l m o e l
physc lme a st r aicusome s makel nst c t e st pur ha et co modii s a e e
ia t l o et l t r ,
oa o usom r o c s he m
te , nd nt r

a r e nswi s ppir t so et emeasi i d p n e td p st re .( 1 3, ! 15 . l
g e me t t u les o t r h tl n n e e d n e o io is DE 5 ! - ) n
h
a t lt howe r De enda sdi notpos es t m e as, dnotope at on ar ult dexc nge,
cuaiy,
ve , f nt d
s s he t l di
re
eg a e
ha

a do l p o ie t err i e tme swi ame nso s e u ai go tep ieo meas 1 !
n ny r vd d h i dal uso r t
h a f p c ltn n h rc f tl. d. !
85 1 22.1
7- 1

TheDeae De e t c a t dpr pe tvebuye sbyt l
lr f ndan s ont c e os c i
r
eephoneortlought i webst
lr
her
ie.

l a ! 1 I arti c ume de dedt pur s ors lprci met s whih i ude g d,
d t
f eal ons r ci o cha e el e ous al, e ncl d ol
.

sl r pltnum , l di , rcoppe ,he woul e e i oag ee
ive , a i
pala um o
rt y
d ntr nt r ment wiht De e Def nt
s t he alr enda s
t t al d f ina i of t ta a ton and pr ie t sor t m e as f r t r t i
ha lowe or
nc ng
he r ns c i
om s d o t e he t l o he e al

! Def nda sJ ge a M a tn c en t tt f ct i t i t ntm at rha c nge snc
1 e nt a r nd ri ont d ha he a s n he nsa
te ve ha d i e

t Cou tsOmni Or rDe ngDee nt'Motont Dimis( 1 ,is donJ
he r'
bus de nyi
fnda s
i o s s DE 55) s ue
une
21, 3.( eDE 1 a 1 11 .Asdic s dbel ldia r ewih Defndant J ge a
201 Se
75 t 0- )
suse ow, s g e t e
s a r nd
M a tn. Thee de e ont r c d c i
ri
vi nc
he e or ontnuest s
o uppor t f ct t CFTC c am s
the a s he
li .
6

c ume s I a 2.ThtDeae De e nt woul c ac t HuntrW i eDe enda st oug t
ons r . d. t
lr f nda s
d ont the
e s f nt hr h he

Lly Dee d n st ef cu t ata ewi t rtic ns me.f . t1 3 !9.Afe c mp ei
o ds fn a t o fe tae rd t he eal o u r # a 5 ,
h
tr o lt
ng
a pur ha e,r t i c t e sr ceve aSlr ns e ofCommodiy'notcefom De enda s whih
c s e al usom r e i d f-a f r
t' i r
f nt , c
pur td t a l t r t i c t r t t kepos es i oft ç c e c modii ' a t i
pore o low he e al usome s o a
s son he s has d om
pur
tes' t her
eeci l
l ton-z

1 The Tr ns e ofCom modiy no i s s ntt c um e s m a t f l ng r pr enttons
2
a fr
t tce , e o ons r , ke he olowi e es a i :

()
a
()
b
()
c

Pr tRe ei i o youra cou
oduc c ved nt
c nt
Pr
oductShi d ou ofy Ac ount
ppe t our c

( ae Dee d n )h rb c n imst a ad p st r (s so i )
De lr fn a t ee y o fr h t e o ioy l td mf'
cu

a horz byag e ment r f n'd t be ow hasr c i d c t dy oft
ut ied
re
s ee e o l
e eve us o
he

goodsa o wa e erc i st eor (t
nd/r rhous t ept herf e t
commo te')i ni d
diis' de tse

()
d
()
e
()
f

a
bove.
te o he t a or
Youra e he e notfe ofde i ro c
r r by ii d
lve f ommodii st t Cusodi n f
y rb tt
ou enei.

Th Cu t da ha n tf d( ae De e d n l h tiwi hods c
e so in s o ii De lr fn a t t a t l l u h
e
l
c
ommo t si a c ra c wihtetr a dc n iin o te( ae
die n c od n e t h ems n o dto s f h De lr
i
Dee d n)P rh s a dSaeAg e me t
f n a t u c a e n l re n
Th wae o erc i t h l b t Cu t da r p e e tg ae
e rh us e eps ed y he so in e rs n De lr
De e d n )c so rc mmo i e so e b fcl isa to ie i te
fn a t u tme o dt s t rd y a ii e uh rz d n h
i
t
Lo na dSe u iyAg e me tEa hwae u er c iti s b e t ot
a n c rt re n . c rho s e ep s u j c t he
s c fct r san con tonsofsor ges tf rh t r i
pe ii e m d dii
t a e o t he en.

()
g

(
h)

Theg o shedb t ec so inrpr sn ( ae Dte d n)c so r
o d l y h u t da e e e t De lr f n a t u t me
c
omm o tessor d by f c lte a horz i t Loa a Sec iy
dii t e
a iiis ut ied n he n nd urt
Age me t A1such goodsaes be tot es e i ctr a dc n iins
r e n. l
r u jc t h p cf ems n o d t
i
o
ofsor ge s tf t t r i
t a e orh he en.
omm odii f
tes or
The c t
usomera knowldgest tupon r eptofc
c
e
ha
ec i
c t e ' a coun , t an wilm ant i c l c i l wih t
usom rs c
t Cusodi
l i an ole tve y t he

c mmo t sh l o b h l o al( ae De e d n je tmes p y ia
o die ed n e af f l De lr fn a t uso r ' h sc l
i
i nt iswh c a ehed atoneormor ofs r lde iores The
nve ore i h r l
e eve a pos t i .

Cu t da as ma a iso drcino d r( ae De e d n)t
so in lo y t t wn ie t r e De lr fn a t o
o
ta f rcusody ofy c
r nse
t
our omm odiist anot rCusodin pr ded s h
te o
he
t a ovi
uc

Cu tda i a t o ie b t ao e ni n dAg e me t a d( ae
so in s u h rz d y he f rme to e re n s n De lr
Dee t i notfe ofs hta fr
fndanl s iid uc rnse .
()
1

Dei r ofComm odiis You a eher byno ii d t t Cusodin has
lve y
te :
r
e
tfe hat he t a
r e e t co m o tesi ntfe abovewhih i ha hel f you t
elas d he m dii de i d
c t s d or
o

( ae De e d n )p s a tt y u o d rf rd l e yo ta se o t e e
De lr fn a t uru n o o r r e o ei r r rn fr f h s
v
c
omm odii .
tes

De piet r pr t a i m a i heta a i a r e e sa c
s t he e es nt tons de nt r ns cton g e m nt nd onûr i ns t CFTC
mato ,he

alg st tDee a t ne rh d a t a p s e so o o t l t t meas ( 1 3 ! 1 )
le e ha fnd ns ve a cu l o s sin f r i e o he tl. DE 5 , 7 .
t
The ef r t r t i c t r c d no t ke pos es i n oft pr i me al a t i e e ton.
r o e, he e a l usome s oul t a
s so
he ec ous t s t her l c i

l t a De e nt us d t rr t lco umer 'f
nse d, f nda s e hei eai ns
s undst ma ta on t open m a ke whie
o ke r des he
r t l
c r ng t cons e s i l t d comm isons aprc s e d,i e e ton t pur td l n,a
ha gi he
um r nfa e
s i s ie pr a ntr s
he pore oa nd

oh rfe .f a ! 4 6 1 - 0
t e e s #. t ! - , 8 2 .
TheHuntrW ieDef nda sofe eda m a edada a e,ç t , t ta l dde e s
e s
e nt f r nd nag
t bas çporal' ha lowe alr
'
a r t lc t e st a ce st i ac ounta ta a to i or a i a pr ded t De e
nd eai usom r o c s he r c
nd r ns c i n nf m ton nd ovi he alr

Dee a t t g n rt rp rso t er ti c so r.I a ! 1 - 2.Hu trW ieg n rtdt e
fnd ns o e eae e o t n h eal u tmes d.t ! 0 1
n e s e eae h
a ountdocumen s t we e g ve t r a lc ume s eve t
cc
t hat r i n o eti ons r . n hough t y we e on t Deae
he
r
he
lr

Dee d n s lteh a a da p ae t b fo teDe lrDee a t.1 a ! 1 - 6.
fn a t' etr e d n p e rd o e r m h ae fnd n s d. t ! 5 1
I i Mo infrSl r J d me t teCFTC s e ss mmayj d m e ta t Co n On
n t to o l
s
mmay u g n ,h
ek u r u g n so u t e
o i Co lit( 1 ,l g lo fe c a g ta s cin i v oaino S ci n4 a o t eAc,
f t mp an DE ) il a, f-x h n e r n a to s n i lto f e to () f h t
s
e
a i t 1e i ngDee nt, nda t CountTwel ofisCompli ( 1,aiur t rgitr
gansa1rmani fnda s a s o
ve t
ant DE )f l e o e se

a aF tr sCo s inMec a tnvo ai no Se to 4()o t Ac, g i s t Hu tr ie
s uu e mmiso r h n i ilto f cin d fhe ta an the n e W s

Dee d n s l a dto teCF rq e t p ril u r j d me t g i theHu trW iea d
fn a t.n d iin,h TC e u ss a t s mma y u g n a ans t ne s n
a
CD Hopki e iy de e
ns ntt f ndant t tt e iy def nt ope ae a S
s ha he ntt
enda s r td s t
comm on e e prs ' f r
nt r ies' o
pur esoft rla lt on al coun soft Com pli t
pos
hei ibiiy
l
t
he
an .

( e mpl ,s eDE 1 1at21 DE 15 2a 339,373) l a tont t aorme i d
For xa es e
509;
0- t
. n ddii o he f e ntone
r pr e a i , heTr f rofComm odiy notcess ntby t NewbrdgeDe e nt c ans
e es nt tons t
ans e
t i e
he
i
f nda s ont i
t f l wi r r s nt i SNe b i Ali nc he e c im st tade ior
he olo ng ep e e aton,ç w rdge la e r by onfr ha
post y

(cuso a )a horz byag e me srfredt beow hasr c i dc t oft goods
û tdin' ut ied
r e nt eer o l
e eve usody he
a do wae us r c it te eo e(c mmo i e ' ie tfe a o ea dt whc y uh l
n /r rho e e ep s h r f r ço dt s) d niid b v n o ih o od
i
tte. ( 1 1a 262, DE 1 2a 3 )
il ' DE 50- t 276; 50- t 03 .
'

I t i M oinf rS mmayJ g n , fn a sJ g r n M a t cam: 1 teHu tr
n her to o u r ud me tDee d nt a e a d ri li () h ne
n
W ieDef nda sdi pos e st pr ci m eal t tt y wer c r t l oblgaed t pr de
s
e nt d s s he e ous t s ha he
e ontacualy i t o ovi

rt lco umes ( t HuntrW ieDeenda swer notrquie t exe ut t s ta a tons
eai ns r; 2) he
e s f nt e e rd o c e he e rns ci
t ough a rgultd e ha be us t ia t dei r 'e e i appled;a ()Seci
hr
e ae xc nge ca e he icual lve y' xc pton i nd 3 ton
2()2)D)ii i va f i l a asa idt Defnda s
c( ( (i) s gue,acaly nd -pple o e nt.
11
1.

LEGAL STANDARD

S -e c u ts alga ts mma yj d me ti t emo a ts o t tt ee i n g n ie
é h o r h l rn u r u g n f h v n h ws ha h r s o e un
l
d s uea t a ymaeil a ta dtemo a t se tte t j d me ta amatro lw. FE R.
ip t s o n tra fc n h v n i nild o u g n s te f a ' D.
'
CI P. 6 a .Th mo a tll y b a st iiil e p nsbit o if r n tedsrc c u t f
v. 5 () e v n l wa s t r he nta r s o i l y f n omig h itit o r o
a
i
t bassf rismoton,a i ntf ng t e pori of'hepladi ,de ii ,a wer t
he i o t
i nd de iyi hos
tons t
e ngs postons ns s o
i e r a ores a a isons on tl t t r wih t a fda t ,i a 'whi i bele
ntr og t i , nd dm s i
se, oge he t he fi vis f ny,
ch t ives
de
monsr t t a e eofag ui is ofma e i lf t' Ceotx Cor v. r t477U. 31
ta e he bs nc
en ne s ue
t ra ac . l e
'
p. Catet,
S. 7,

3 3( 98 )( u tn F D. CI P. 6 c( )A).W heet en n- vngp ryb a s h b r e o
2 1 6 q oig E R. V. 5 ()1( )
r h o mo i a t e r t e u d n f

p o fo a is ea tilt emo a tma smpyû p it o t ot edsrc c u th tt r i a
r o n n su t ra ,h v n y i l ç on) u t h itit o r ta hee s n
l
a e eofe de e t s
bs nc
vi nc o uppor t nonmovi pa t sc s ' 1 a 325.
t he
ng ry' a e. d. t
'

Ahe t mova hasmetisbur nunderRul 56() t bur ns fst t non- ng
r he
nt
t de
e c ,he de hit o he movi
pa t t esa iht tt r i a g nui is ofma e i lf c .M at s t Elc I s Co.Lt v
ry o tbls ha he e s e ne s ue
t ra a t
su hia e . ndu . , d. .

Ze ihRa i Cop.4 5U. 5 4 5 5( 9 6 .Alh u hal e s n bl if rn e aet b d a
n t do r , 7 S. 7 , 8 1 8 ) t o g lra o a e n e e c s r o e rwn
i fvoroft non- ngpa t Ander v.Li ry Lobb I c.477U. 242, ( 986) he
na
he movi ry,
son be t
y, n ,
S. 255 1 ,
' td mor t n smpl s w t tt r i s
l
mus o
e ha i y ho ha he e s ome metphysca do a t t m aera f c s'
a
i l ubt s o he t i l a t .
'
movi pa t ma notr s upon t mer ale tonsor
ng ry y
et
he
e lga i
M atu hia,475 U. at586. The nonss t
S.

de i l oft a r epa t spl a ng buti t a m us c
n a s he dve s ry' e di s, nse d
t omef wa dw ihis ii f c ss
or r t tpecfc a t howi
ng
9

t a t r i age uneis ef rtil' 1 a 5 7 (mp a i i oi ia)(iig FE R.CI P.
h t hee s n i s u o ra . d. t 8 e h ss n rgn l ctn D.
'
V.
56().t her t r or tke asawhol c dnotla ar tona tiroffc t fndf t none) t e he ec d a n
W
e oul
e d ai lre a t o i or he
m ov ngpary, he ei no l en neis f ti .' f 1A m e e çcntla'ofevi nces
i
t t r s g ui s ue or ral'' #. 1
r s i il
de
uppori
tng

t eo p sn p ry sp sto wil o s fc ;h r mu t ee o g of s o n t t h j r c u d
h p o ig a t' o i n ln t ufie te e s b n u h a h wig ha t e u y o l
i
ra o a l fn f r h t a t ' Wa k rv Da b 91 F.d1 7 1 7 ( 1hCi. 9 0 .l ten ne s n by i d o t a p ry. le , r y, 1 2 5 3, 5 7 1 t r 1 9 ) f h o
'
movi pa t f ist ma a s fc e s
ng ry al o ke uf i nt howi onanes e i le e tofhi ca eonwhi hehas
ng
s nta l men
s s
ch

t eb r e o p o f t emo igp ryi e tte t aj d me t samatro lw.Ceo e Cop.
h u d n f r o ,h vn a t s n ild o u g n a
te f a
ltx r ,
477U . a 323.
S. t
Es e i ly, ol a t non- ovi pa t ha ha af lo
s ntal s ong s he
m ng ry s d ul pporuniyt conduc dic r
t t o
t s ove y,
i mus c ef wa d wih a fr ai e de t s
t t om or r t fim tve vi nce o uppor isc a m .Ande s 47 U. a 25
tt li
r on, 7 S. t 7.
I t e de e a nc by t non- ovi pary li mer l col a e or i notsgnii a l
f he vi nc dva ed
he
m ng t is
ey or bl, s
i fc nty

p o aie te s mmayj d me tma beg a td' I . t2 9 5 Th Co r d e no weg
r b tv ,h n u r u g n y rn e . d a 4 - 0. e u t o s t ih
'
c n lcige d n e S o v Ci o ln a 4 5F.d1 3 ,1 40( 1hCi. 00 )r h' a dr h'
o fitn vie c , k p . t fAta t , 8 3 1 0 1 1 t r2 7 , e g n e g
y
e b n de id, 5 F. p' 8 3( 1hCi. 0 ) a dt Co r d e n t eemiet ece iiiy
n a c ne 2 4 Ap x 0 1 t r20 7 , n he u t o s o d tr n h rdb lt
o win s e . J n sv UPS Gr n Fr i t 6 3 F.d 1 3,1 9 ( 1h Ci.2 2 (iain
f tess o e .
ou d egh , 8 3 28 2 2 1 t r 01 ) ctto
omitd) Upon dico rng a ge nemae ildiput offct t Cour mus den s
te .
s vei
nui
tra s e a , he
t t y ummay
r

j d me t n p o e dt til 1 a 1 9
u g n a d r c e o ra. d. t 2 2.
W ih t esa r i mi It nt t is sr s d i t Pa tes M otons
t hes tnda ds n nd, ur o he s ue aie n he ri ' i .
I
V. DI
SCUSSI
ON

A.

Count0ne-Seci 4()ast Al De ndant
ton a o l fe
s

Do d Frn a t o ie teCF - surs ito o e lv r g d magn d o ûn nc drti
d - a k u h rz d h lc'j idcin v r e ea e , r ie , r a e eal
c
omm odiis ta a tons l t ta a i i ve a r t i c t m e ,a pe s who i no a
te r ns c i . f he r ns ctons nvol
e a l us o r
r on
s t n
1
0

El i eCo ta tPa t i a t s e7U. C.j1 ( 8 ( ( ) t e teta s ci n mu to c ri a
i bl n rc ri p n , e
g
c
S.
a 1 )A)xi, h n h r n a to s s c u n

r g ltd e c a e o bo r o ta e S e 7 U. C.j 2 c( )D) Un e uae c mmo t s
e u ae x h ng r ad f rd . e
S.
()2 ( . r g ltd o die
i
ta a tonsvi aet CEA and, he ef r a eil ga .
r ns c i
ol t he
t r o e, r le l
ovi d vi nc
he e or m ta i hat
I t i tnt m at r t CFTC pr de e de e on t r c d de onsr tng t
n he nsa
te , he
De e nt e ge i and/ ofe e fna dc modiyta ac i ,ncl nggol sl r a
f nda s nga d n
or f r d i nce om
t r ns tons i udi
d, ive , nd
pl i ,be we n J y 1 2011 a Fe u y 25,201 a t tt y di notconduc t s
atnum
t e ul 6,
nd br ar
3, nd ha he d
t he e

ta s ci n on ar g ltd e c a e a rq r d b S cin 4 a o te CEA. S e 7 U. C.j
r n a to s
e uae x h ng s e uie y e to () f h
e
S.

2 c( )D) ( 1 3 a ! 18 ( i n t win s d p sto s a afd vt d s rb n te
()2 ( ; DE 5 t ! - ct g o t e s e o iin nd f a is e cii g h
i
commodii tans tonsa is i t i tntmat l.
tes r aci t s ue n he nsa
ter)
Ea hDee nte ge i c
c fnda nga d n onduc t trs tdi t vi ai ofSe in4( oft Act
tha e ule n he olton
cto a) he .
The De e Def nda s s iie a ofe e snanc d pr ci m ea ta a tons t r t l
alr
e nt olct d nd f r d
e
e ous tl r ns c i
o eai
c ume s The s ntçTr nse ofComm odiy'notc st r t lc um e swhoentr di t t s
ons r . y e i a f r
t ' i e o eai ons r
e e n o he e
ta aci t tpum ore t alow t t o a nt me asupont i eec i Hunt rW iet
r ns tons ha
td o l hem o bti he t l
her l ton.
e s ook
o de s fom t Ll
r r r he oyds Def nt r ga di ne r t lc
enda s e r ng w eai omm odiy tans tons m a ged t
t r ac i , na
he
da a s t te c e t ta a tons a ge r t t doc e scontr i t ta a tons
t ba e ha xe ut d he r ns c i , nd ne aed he um nt
sm ng he r ns c i .

Re iwigt ta s cins no j t h pat ua pat si teta s cin, fn t a t e
ve n he r n a to , t us t e ri lr ri n h r n a to I id h t h
c
e
c
omm odii sta a tonsi ve non- i bl Con r c Pa tci nt , . ,e a l ons r , ndt
te r ns c i nvol d
Elgi e ta t ri pa s ie.r t i c ume s a he
ta aci we eEna e t oug l .Thefna d pr c ousm e a ta ac i a is her
r ns tons r
nc d hr h oans
i nce e i
t l r ns tons t s ue e

we e s
r uppos d t ha bee c
e o ve n onduc e on a r gult e ha
td
e aed xc nge. Ther f e,t CFTC ha
e or he
d

j rs ito t e f ret eCEA a i rltst t e eta scins
u idcin o n o c h
s t eae o h s r n a to .
TheAct alDe ie y Exc pton
u
lv r
e i

Co g e se c p e fo teCF Se fr e n j rs ito ta s ci n ta rs le i
n rs x e td rm h TC' n o c me t u id ci n r n a to s h t e utd n
l cua d l eywi i 2 d y . 7U. C, 2 c( )D)i (l)a ) Un e t eCFTC' itr rtto
i t l ei r t n 8 a s' S. j ()2 ( (i ll( a . d rh
a
v
h
'
)
S n ep eai n
ofi ct lde i r 't CFTC r ogniest tCongr s us oft t r t ct l' e r it l
t ua lve y,'he
a
ec z ha
es ' e he e m f ua 'r quies t o ook
a
be ndt c ta tdoc
yo he on r c
ument a r vi w r e
s nd e e elvantf t soft ta a ton, nc udi
acor
he r ns c i i l ng:
Owne s p,pos es i tte, physc l tonoft c modiypur ha e or
rhi
s son,il and
ial ocai
he om
t
c sd
s d,bot bef ea afe e uton oft agr e e ,conta ,orta a ton; he
ol
h or nd tr xec i
he e m nt
r ct r ns c i t
naur oft r l tons pbe wee t buye , eler a pos es oroft c
t e he e a i hi t n he
r s l , nd s s
he omm odiy
t
pur has o s d;a t m ame i whi t pur has or s e i r cor d a
c ed r ol nd he l r n
ch he c e
al s e de nd
c
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ci n 3 b f h t y ho ng h t fn a t s r s n o to f h a kso n i
y
defnda a i e i t vi aeSe ton4( oft Ac.
e nt nd nduc d t o olt ci a) he t
Newbrd Contol
ige
r
The CFTC ale t tDe e a Ki t s e i or a or owner a ope a or of
lges ha f nd nt ng, he ol nc por t ,
, nd
rt

Ne rd e i a !2 , o to lda dk o n l id c dt ee tt' c d c.Hewa a to ie
wb ig ,d. t 8 c nr le n n wigy n u e h n i s on u t
y
s uh rz d
t hiea fr wbrdgee pl es ma ge e i sba a count a f , ndp e r d
o r nd ieNe i m oye , na dN wbrdge' nk c
s nd unds a r pa e
t c e f Ne i swe ie.f Ne i swe iec ane l
he ontnt or wbrdge' bst #. wbrdge' bst ont i d angua s i tngr t i
ge olcii e a l
cusom e st e ge i fnanc r a lcommodiy tans tons f A sChi fExec i Ofe of
t r o nga n i ed eti
t r aci . #.
e
utve f r

Ne i
wbrdge,De e nt Ki s vie t Ne i s es saf on a da t da bass. 1
f nda
ng uper s d he wbrdge al t f
y-o- y- i d.
De e ntKi unde soo a o raw t dal o r to of
f nda
ng
r t d nd ve s he iy pe a i ns Newbrdgea knowi y e bl
i
nd
ngl na ed

t conduc t tldt Ne i vi ai Se ton4()oft Ac bys i tngc ume sf t
he
tha e o wbrdge oltng ci a he t olcii ons r or he
pr cousmetlta a tons.
ei
a r ns c i

CD Ho n Con r
pkis
t ol

The CFTC s kst a y Se i 1 b)oft Actt Defnda Hopki 'c r a
ee o ppl cton 3(
he
o e nt
ns ontol nd
knowi i
ng nduce ntofCD Hopki 'c
me
ns onduc .Def ntHo nswasr ponsbl f day-o- y
t
enda
pki
es i e or t da
oper tonsan he m a ge t CD Hopki ' webst i l ng t c e t ta ts d t
ai
d
na d he
ns s
ies ncudi he ont nt ha dverie he

c mmo i ta a to .1 a ! 3 Heu e Had As e' b n a c u ta ap ro a a c u t
o dt rns cins d. t 4.
y
s d r s ts a k c o n s es n l c o n,
whi i t s m ea c
ch s he a
c ountt tr c i dt f
ha e e ve he undsfom c r sa id a ns t ta nga co s
r ha ge pple gai t he r di c unt

o CD Ho k n 'eal u t me s 1 a !35 CD Ho is d c me t came ta HadAs e wa
f
p i s rt ic so r . d. t .
pkn ' o u ns li d h t r s t s
a lnde ,ye i di no make an dibur e e off
e r tt d t
y s s m nt undst CD Hopki 'r ai cons r . f
o
ns et l
ume s #.
De enda Hopki 'c
f nt
ns onduc de
t monsr t st thekne t co ea tvii ofCD Hopki , nd is
ta e ha
w he r c i tes
ns a t

afiit,a e bldt m t co i i vi ai ofSe ton4()oft Ac.Ifndt tt CFTC
flae nd na e he o ntnue n olton
ci a he t i ha he
18

ha s
s hown t tDefnda Hopki i ibl t ough Se ton 1 b)bec us he c r ld CD
ha
e nt
ns sla e hr
ci 3(
a e
ontole
Hopknsandknowi yi
i
ngl nduce i t vi at Seci 4( oft Ac.
d t o ol e ton a) he t
5.

USCT Contol
r

The CFTC con en t tDe e ntM oor c r ld a knowi l i ed USCT t
t ds ha f nda
e ontole nd
ng y nduc
o

vi aeSeci 4()oft Ac.Hee, f ntM o eha die tori rc c r ove USCT'
olt ton a he t r Deenda
or d rc ndie t ontol r
S
ba a ount a s r i e orcontole t e who c r ld,t da t da ope a i of
nk cc s nd upe v s d,
r ld hos
ontole he y-o- y r tons

USCT. I a ! 2 Fu t r h wa a r o US S iv l e n i te rti c n u r
d t 9. rhe, e s wae f CT' n o v me t n h eal o s me
c
ommodiista a tonsa a l
te r ns c i nd lowedt m t c tnue The e or lfndt De e nt oor was
he o on i . r f es i hat f nda M e

i c r ofUSCT andknowi yi edit vi aeSecin4( oft Act
n ontol
ngl nduc t o olt to a) he .

C.

Co nEntr iea t t eHun e WieEn i fe a sa heCD Ho i
mmo
eprs s o h
tr s tt
yDe nd nt ndt
pkns
Fa#t Dee a s
p f nd nt
.

1
.

Hu trWief ï ' f n nsCo nEn eprs Anay i
ne s W?) Dee da t mmo tr ie lss
/

De e
f ndant J era M a tn do no diput t CFTC' c enton t tt Hu e W ie
s ag nd ri
t s e he
S ont i ha he ntr s

EniyDee da t o e ae a ac mmo e tprs . ( 1 6 a 8 .Th y h we e , ip t t
tt fn ns p r td s o n n e ie DE 9 t ) e , o v r d s ue he
CFTC' i ia i t theç-untrW iee ii so r t da ac mone e rs wiht De e
S mplc tons ha t ll e s ntte pe a e s om
l
nt p ie t he alr
De e nt .'f Si et CFTC r quese i isM otonf rSum ma yJ
f nda s' #. nc he
e td n t
i o
r udgmen t tt Cour fnd
t ha he
ti

t tt eniydefnda si rtdasspaaec
ha he tt e nt ç ae
ope
e rt ommone e ies'( 1 a 1 ,t ei no
ntmrs , DE 49 t 5) her s
'
diput ast t sis l The ef e ltnd t tt HuntrW ie e iy de e
s e o hi s ue.6
r or , l ha he
e
s ntt f ndant ope a e a a
s rtd s
c mon e e prs
om
nt r ie.

1 Ev niDee a t Jg ra Mat s u h t o poeteCFTC' cam t tteHu trWie
6 e f fnd ns a e nd ri o q to p s h
n
S li ha h ne s
e iy def nt a e a a c
ntt enda s ctd s omm on e er e t y woul f l TheCFTC pr vi d detie
nt pns , he
d ai.
o de
a ld
f t r ga di how t Hun e W iee iy de e nt hed t m s vesouta asngl ope a i
ac s e r ng
he
t r s ntt f nda s l he el
s i e r ton,
di notha s pa a eofi s c s r r ve
d
ve e r t fce pa e, ha ed e nue, De e
and f ndant M ari a J ge we e
s
tn nd a r r

o tc r i al fteHu trW iee tt dee d n s ( 1 , !3 3 ) Th Hu trW iee t y
fs es n l o h n e s niy fn a t. DE 53 ! 0-2 . e n e s ni
t
de e
f ndant di ope a easa c
s d rt
omm onent prs
er ie.
19

CD Ho i f'/? De n a t Co
pkns a /p # d n s mmo En eprs An y i
n tr ie alss
.

I isM oton f Pari Sum ma yJudg e ast whehert CD Hopki Entt ope a e
nt
i or tal
r
m nt o
t he
ns iy r t d

asac mon en e rs t CFTC' f ct de c i how CD Hopki , r As e ,a De e a
om
t m ie, he
S a s s rbe
ns Ha d s t nd f nd nt
Hopki aced a o uni.Asdic s pr vi l Def nda Hopki c tole t c
ns t s ne t
s us ed e ousy, e nt
ns on r ld he onduc of
t
bot CD Hopki a Ha dAs et Ha d As e di notr cevea i m ebesde wha i r c ve
h
ns nd r s . r s t d
e i ny nco
i s t t e ei d

fom t prc s ea i ees, nds r ief sc r edt CD Hopki 'rt l ume s ( 1
r he ie pr d,ntr ta e vc ee ha g o
ns eaicons r . DE 53,

!3 ) Dee d n Ho knswo l u emo e i Had Ase' a c u t t s p o tCD Ho kn '
5 . fn a t p i
ud s n y n r s ts c o n s o u p r
p is
ope a i
r tons.f Addii l Hm' As e wa na
#.
tonaly, d s t s medasalnde i CD Ho ns doc nt , i
e rn
pki ' ume s but t
di no dibu s a f
d t s r e ny unds t CD Hopki ' r t i c ume s t fna e t pr ci m eal
o
ns e a l ons r o i nc he e ous t
ta a tons 1 As s h,Itnd t tt CD Hopki en iy de e nt oper t d asa c
r ns c i . d.
uc
s ha he
ns tt f nda s
ae
omm on
e e prs
ntr ie.

D.

Co ntT le-Se do 4 d a t t Hune WieDe nd n s
u wev c n () s o he tr s fe a t

Unde Se ton 1 ( ,a %f ur commison me c nt'i a i vi l asocai
r ci a28) sut es
si
r ha ' s n ndi dua, s iton,
parne s p,c or i ortus t i e
t r hi om aton, r t hat s ngag d i s iii ori a e i or r f ...a
e n olc tng n cc ptng de s or
ny

a re n , o ta t o ta a to dec ie i s cin 2 c( )C)I. 7U. C. 1 ( 8 .S cin
g e me tc nrc, r rns ci n s rb d n eto ()2 ( ()' S. j a2 ) e to
'
4( oft Ac r uie a i vi loreniyenga di commodiistans tonsde ci d i
d) he t eq rs ny ndi dua
tt
ge n
te r aci
s rbe n
7U. C.2()2( () a t rf esaft esc
S. c( D)l, nd,heeor uur ommiso merha ,t r gitrwih t CFTC.
sin c nt o e se t he
e
ousy ound t t Hunt W ie Def nda se ged i
hat he
er s
e nt nga
n
See7U. C.j6( () Becaus lprevi l f
S.
d)a.

ta a tonsde ci i Seci 4()ofheAc,heHu e W ieDef nt weerquie t ha
rns ci
s rbed n ton a t tt ntr s enda s r e rd o ve
r se e wih t CFTC a f t e c
egit r d t he
s uur s omm isonm e c st e agei t tans tons The di
si
r hant o ng
n he r ac i . y d

n td s ,i vilto o S cin 4 d .Se i Th rf r , fn t a n d s u eo maeilfc
o o o n oain f e to ( ) e d. e eo e l i d h t o ip t f tra a t

e se a ds mmayj d me t swarn e a t Co n Twev o teCF SCo lit
xitd n u r u g n i ra td s o u t le f h TC' mpan .
20

E.

Va nes A nal i
gue s
yss

Dee nt M a tna J g contndt tSeci 2( ( ( (i)ofTil 7a t CFTC'
fnda s ri nd a er e ha ton c)2)D)ii
te nd he
S
i e r tton ofSa t delver 's dbevoi d be a et y a eva l The be ivet tt
nt p ea i
écual i y' houl
de c us he r gue.; y le ha he
Ac i i e ra a g
tsk
uncla nd mbi uousast how Hunt rW iei r uie otadenon-t r ze c r c s
o
e s s eq r dt r
sanda di d onta t
i vi c h/pot ke m eal ta a tonsuponar gult dboa doftade, xc nge, c r c
nvol ng as s mar t t s r ns c i
e ae
r r e ha or onta t

mak t' ( 1 6a 9 , n t ya sr afca c aln et S cin 2 c( )D)ii.
r e, DE 9 t ) a d he se t a il h le g o e to ()2 ( (i)
'
M ahe ai a ce t nt i notobeexpe t wheni e pr tnga1w f va nes .Gr yne
t m tc l rai y s t
ced
ntr e i
a or gue s a d

v Ci o cf r 4 8U. 1 4, 1 (9 2 .A 1w s o l o l b fu dv g iistr a es
, t fRo ko d, 0 S. 0 1 0 1 7 ) a h ud ny e o n a ue f t ems r o
y
i fniet tlme ofco mon i elge mus nec s aiy gue sa ism e ni a dif a t
nde i t ha ç n
m
nt li nce
t e s rl
s t t a ng nd fer s o

isa i ton. Connal v Ge Co t.Co. 269 U. 385,391( 926 . W hen deemi ng
t pplcai '
'
l . n, nsr ,
y
S.
1 )
tr ni

wh te a1w i va u ,h Co t l lo t i a t e(tt t)a awh l p o i t . Gryn d,
eh r a s g e te ur wi o k o t t h saue s o e r hbi ' a e
l
wh
s'
4 U. a 1 0( i n Esa a v Ce . . tt Col, 5F.d1 7 ,1 8 ( t Ci. 9 9 .
08 S. t 1 ct g tb n . ntMo Sa e l.41 2 0 7 0 8 8h r 1 6 )
i
As p e o sy d suse S cin 2 c( )D) r q rs t os e a e i c mmo i e
rviu l ic s d, e to ()2 ( e uie h e ng g d n o dt s
i
ta a tons t pur has a s l t e c modii son a r ult d boa d oftade,e
r ns c i o c e nd el hos om
te
eg a e
r
r
xcha
nge,or
c r c ,ml sce ti exc ptonse s,ncudi acual lve yof hec modii wihi we y
onta tt es ran e i xiti l ng t dei r t om
tes t nt nt tt e i o
nd o
t ypesofta a tonst s
r ns c i hi
ei da oft ta a i The sa ut detnest whom a t wha t
ght ys he r ns cton.

s ci na pisa d t rf r , ve wh m a do e wh t h CFTC h sj rs ito F rh r r ,
e to p le n ,heeo e o r o n v r a t e
a u id cin. u temoe
t Ac pr dest CFTC wih t c tonst tm us bepr s bef r i ca e or Se ton
he t ovi he
t he ondii ha
t
e ent o e t n nf ce c i

2 c( )D) Me o c mmo i tlie c wo du d rtn t sau esme nnga dwo l n t
()2 ( . n f o n nelg n e ul n e sa d he tt t' a i n u d o
rf e l i ha ci c)2)D)ii s t a aly gue.
)
dif ra t isapplc ton.Theeor, fndt tSe ton2( ( ( (i i no fci l va
fe s o t
iai
1 Afe t CFTC notd t tDef nt J ge and M ari di notclrf t t ofc lnge
7 tr he
e ha
enda s a r
tn d
a iy he ype hale

t yweema ngi t i CountrM oton,( 1 a 1 , e nt J ra M a tn
he r ki n her
e - i DE 95 t 2) Defnda s age nd ri
e anedt tt yweease tngbohaf i c lngea a a -pple c le ( 1
xpli ha he r s ri t acal hale nd n sa id halnge. DE 96
a 8n.3)
t 1 .

l a ton, Def nda s M a tn a J ger make a a - pple c l nge t Sec i
n ddii
e nt
ri nd a
n s a id hale
o
ton

2()2)D)ii, i e ee b t CFTC i isI ei l epr ai andFi ll epr ai (
c( ( (i)as ntmrtd y he
n t ntrm ntr etton
na ntr etton. DE
1 a 9- 0) The a g t tt CFTC hasnotpr de fi notc bec us t CFTC f l t
96 t 1 . y r ue ha he
ovi d ar ie a e he
ais o
pr de acla detnii ofça t ldelver ' Def nda sJ erand M a tn c e t tt k
ovi
e r l ton 'c ua i y.
' e nt ag
ri ont nd ha ' et
mar
pari pa scn
tci nt nnotknow orunde sa t a ia i oft t ee f c or whih t CFTC wil
rt nd he pplc ton he hr a t s c he
l
u iiet deer ne i çc ualdei r hasbee s tsi d. I at9.
tlz o t mi f a t
lve y'
n a ife ' d.
'

W he e ci asaue, r smus e ueino onl % o deglt ki ofnotc t t
n na tng tt Conges t ns r t t y : vi s he nd
pr
ie ha
wilena e or nar pe e t unde sa wha c
l
bl di y opl o
r t nd
t onduc i pr hi t' but a s t t i does not
t t o bis'
lo ha t
aut i orée n e our gea bir r a dic i na or e or me . Unie atsv Di e r
horze éve nc a r ta y nd s rmi t y nf ce nt' tdst e . Pito,
'

61 F.d 1 69 1 71( 1h Ci. 01 )( i n Ci o c gov M o a e ,5 7U. 41 5 ( 9 9
5 3 3 , 3 1 t r 2 0 ct g t fchia . r ls 2 S. , 6 1 9 )
i y
( ic si a a -p le c aln ei teci n la c n e t)
ds u sng n sa pid h l g n h rmia lw o txl.
e
S ci n 2 c( )D)ce ry p o cie t ec nd c i whih te Hu trW ie Dee a t
e to ()2 ( lal r s rb s h o u t n c h n e s fnd n s
enga d a t t saut i no unc tt tona as a i d t t m . The r l va s ton
ge nd hus he tt e s t onsiu i l
pple o he
e e nt ec i
pr hi t fna e r t lc modiyta a tonst ta eno ta d onar gult e
o bis nc d eai om
t r ns c i ha r t r de
e a ed xcha unl s
nge, es

a t dei er oc ured. De e nt e e ed i o a o ofe e c m o te as de c i i
cual lv y c r
f nda s nt r nt nd/ r f r d om dii s
s rbed n

Se to 2 c( )D)a dt e dds e e t o g t eta s ci n weeno o arg ae e c a g .
ci n ()2 ( n h y i o v n h u h h r n a to s r t n e ultd x h n e
Aslf
oundpr vi l De end sdi notdelve a m eal t r t l
e ousy, f ant d
i r ny t s o e aicons
umer ; he c dnotdo
s t y oul
s be a et ydi notha pos es i tte, owne s p oft commodii s De e
o c us he d
ve s son, il or
rhi
he
te . f ndan sJ ger
t a

a M atnc n t o ial a sr ta t e ddn te evef iç tc t a ( l)e a l odiay
nd ri n no l gc l se th th y i o r c i ari ie h t woud n b e r n r
y
no

pe pet u d rtn wh t o u f t a p ia l s cinp o iis Ho tnv Ci o . g si ,
o l o n esa d a c nd c 'he p lc b e e to r hb t. ro . t fstAu u t
y
ne
F/ ,27 F. 1 8,1 ( 1h Ci.2001 .
J. 2 3d 31 331 1 t r
)

Furhe m o e t saut doe nott our gear ta ya dic i i t y e or e e 'of
t r r , he tt e s
i
enc a
bir r nd s rm na or nf c m nt'

f t esc mi son me c nt . l a horze t CFTC t r gult i i dual a e iis t t
u ur om s i
r ha s t ut i s he
o e a e nd vi s nd ntte ha

e a i commo te ta a tonso ar gultdexc ng aspr crbe i Se ton2( ( ( ,
ng ge n
diis rns ci n e ae ha e
os i d n ci c)2)D)

e e wh n to e i iiuas a e t is atmp t cru e to te CFTC' j rs ito
v n e h s ndvd l nd ni e te t o ic mv n in h
t
S u id cin.
Def nda ss
e nt oughtt a d r gulto a t CFTC e or d t l oft CEA agans t m .
o voi e ai n nd he
nf ce he aws he
i t he
M a ke pari pa swho donote gei pr bie ta a tons t ewho a t lydelve me as
r t tci nt
nga n ohi t d r ns c i ,hos
c ual i r t l
t t i r ti c umer ,a epr eced fom e or eme .
o her ea l ons
s r ot t r
nf c nt
Lasl t Sup e Cou t ssa e t toneç
ty, he r me
r ha tt d ha
i e age i s ec
who ng s n om onduc t ti cla l
t ha s e ry

p os i d ca
r crbe nnotcompli oft va nes oft l a a id t t c
a n he gue s he aw s pple o he onduc ofot r .' Di
t
he s'

Pito 61 F.da 1 7 ( u tto so te ) Theeo e De e d n sJ g ra dM a t sp o o e
er s 5 3 t 3 2 q oain mi d . rf r , fn a t a e n ri r p s d
t
n'
e mpl ofhow t a ia e s c i ma beunc tt tona i a he c e i i pplc e
xa e
he pplc bl e ton y
onsiu i l n not r ontxt s na iabl
he e.
r
CONCLUSI
ON
Ac or ngl i i her by
c di y, t s e
ORDERED AND ADJUDGED t
hM

Th CFTC' M oi nfrS mmayJ g n ( 1 )i GRANTED;
e
S to o u r ud me t DE 49 s
Dee d n ' Co n e M oi nf rS mmayJ d me t( 1 6 i DENI
fn a ts u tr to o u r u g n DE 7 ) s
ED;
Dee a tsCo n e M oinf r mmayJ d me t DE 1 6 i DEEM ED tmey
fnd n ' u tr to o Su r u g n ( 7 ) s
i l
tld;
se

23

J m e s l bee e ed s par t yi f voroft CFTC a a i tHunt rW ie
udg nt ha l ntr e ael n a
he
nd ga ns
e s

De e nt t CD Hopki Def nda s a heBlcksoneDe e nt a t Count
f nda sshe
ns e nt , ndt a t
f nda s s o

Oneoft Compl nt( 1;8
he
ai DE ):

TheCFTC' M oto f Pa ta SummayJ
S in or ril
r udgmen ( 1 i grntd.TheCour
t DE 49) s a e
t
fnds t tt Hunt r W ie e iy de e n sa CD Hopki e iy de e
i
ha he
e
s ntt f nda t nd
ns ntt f ndan s
t

ope a e a ' om mon e e p ie ' f rpur esoft i la lt on a lc soft
rtd s f
c
ntr rs s' o
pos
her ibiiy
l ount he
Co pl nt a
m ai ; nd
6.

J m e s l be e e e s pa ael i f voroft CFTC and a i tt Hun e
udg nt ha l nt r d e r t y n a
he
gans he
tr

W ieDee nt a t CountTweveo t Complit( 1 .
s fnda s s o
l f he
an DE )
DONE AND ORDERED i Cha r n W es Pal B
n
mbe si
t m

, li ts
orda, hi

da of
y
M '

Fe ua y, 4.
br r 201

DO ALD M .M I
DDLEBROOKS
UNI
TED STATES DI
STRI J GE
CT UD

Copi t
es o:

Couns ofRe d
el
cor
M ea eE.Da in,Spe alM oniora Cor ae M ana r
lni
m a
ci
t nd por t
ge
J A.Ki l s tseDef nt
ohn
ng, lrr?
enda
Chade c Hopki , oseDef nt
wik
ns pr
enda

1 Asoft y,t r m ani De e nt c itof t Hun e W ieDe enda s t CD
8
oda he e i ng f nda s onss : he
t r s f nt ,he
Hopki De e nt , heBl ksoneDe e da t ,t USCT De enda sand t Ne i ge
ns f nda s t
ac t
f n n s he
f nt
he wbrd
Def nt Sete e a ova i pendi bef e t CFTC ast t U SCT De e nt a
enda s. tlm nt ppr l s
ng or he
o he
f nda s nd
t eNe i De e nt Shoul t CFTC a ove t s tl nt t Pari ma move t
h wbrdge f nda s.
d he
ppr
he eteme , he tes y
he
Cour t va a e isfndi si t sOr era t t pa tc arDef nt . Shoul a fna
t o c t d t i ng n hi d s o he ri ul
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ete n o e p r v d,h u t h le tr u g me t g i the CT fn a t n
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he wbrdge f nda t s o
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