7 USC 9 - Prohibition regarding manipulation and false information

U.S Code last checked for updates: Nov 22, 2024

§ 9.

Prohibition regarding manipulation and false information

(1)

Prohibition against manipulation

It shall be unlawful for any person, directly or indirectly, to use or employ, or attempt to use or employ, in connection with any swap, or a contract of sale of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity, any manipulative or deceptive device or contrivance, in contravention of such rules and regulations as the Commission shall promulgate by not later than 1 year after July 21, 2010, provided no rule or regulation promulgated by the Commission shall require any person to disclose to another person nonpublic information that may be material to the market price, rate, or level of the commodity transaction, except as necessary to make any statement made to the other person in or in connection with the transaction not misleading in any material respect.

(A)

Special provision for manipulation by false reporting

(B)

Effect on other law

(C)

Good faith mistakes

(2)

Prohibition regarding false information

(3)

Other manipulation

(4)

Enforcement

(A)

Authority of Commission

(B)

Contents of complaint

A complaint under subparagraph (A) shall—

(i)

contain a description of the charges against the person that is the subject of the complaint; and

(ii)

have attached or contain a notice of hearing that specifies the date and location of the hearing regarding the complaint.

(C)

Hearing

A hearing described in subparagraph (B)(ii)—

(i)

shall be held not later than 3 days after service of the complaint described in subparagraph (A);

(ii)

shall require the person to show cause regarding why—

(I)

an order should not be made—

(aa)

to prohibit the person from trading on, or subject to the rules of, any registered entity; and

(bb)

to direct all registered entities to refuse all privileges to the person until further notice of the Commission; and

(II)

the registration of the person, if registered with the Commission in any capacity, should not be suspended or revoked; and

(iii)

may be held before—

(I)

the Commission; or

(II)

an administrative law judge designated by the Commission, under which the administrative law judge shall ensure that all evidence is recorded in written form and submitted to the Commission.

(5)

Subpoena

(6)

Witnesses

(7)

Service

(8)

Refusal to obey

(9)

Failure to obey

(10)

Evidence

On the receipt of evidence under paragraph (4)(C)(iii), the Commission may—

(A)

prohibit the person that is the subject of the hearing from trading on, or subject to the rules of, any registered entity and require all registered entities to refuse the person all privileges on the registered entities for such period as the Commission may require in the order;

(B)

if the person is registered with the Commission in any capacity, suspend, for a period not to exceed 180 days, or revoke, the registration of the person;

(C)

assess such person—

(i)

a civil penalty of not more than an amount equal to the greater of—

(I)

$140,000; or

(II)

triple the monetary gain to such person for each such violation; or

(ii)

in any case of manipulation or attempted manipulation in violation of this section or section 13(a)(2) of this title, a civil penalty of not more than an amount equal to the greater of—

(I)

$1,000,000; or

(II)

triple the monetary gain to the person for each such violation; and

(D)

require restitution to customers of damages proximately caused by violations of the person.

(11)

Orders

(A)

Notice

The Commission shall provide to a person described in paragraph (10) and the appropriate governing board of the registered entity notice of the order described in paragraph (10) by—

(i)

registered mail;

(ii)

certified mail; or

(iii)

personal delivery.

(B)

Review

(i)

In general

(ii)

Petition

To obtain a review or other relief under clause (i), a person may, not later than 15 days after notice is given to the person under clause (i), file a written petition to set aside the order with the United States Court of Appeals—

(I)

for the circuit in which the petitioner carries out the business of the petitioner; or

(II)

in the case of an order denying registration, the circuit in which the principal place of business of the petitioner is located, as listed on the application for registration of the petitioner.

(C)

Procedure

(i)

Duty of clerk of appropriate court

(ii)

Duty of Commission

(iii)

Jurisdiction of appropriate court

(Sept. 21, 1922, ch. 369, § 6(c), formerly § 6(b), 42 Stat. 1002; June 15, 1936, ch. 545, § 8, 49 Stat. 1498; June 25, 1948, ch. 646, § 32(a), 62 Stat. 991; May 24, 1949, ch. 139, § 127, 63 Stat. 107; June 16, 1955, ch. 151, 69 Stat. 160; Pub. L. 85–791, § 7(b), Aug. 28, 1958, 72 Stat. 944; Pub. L. 86–507, § 1(2), June 11, 1960, 74 Stat. 200; Pub. L. 90–258, § 16, Feb. 19, 1968, 82 Stat. 30; Pub. L. 91–452, title II, § 202, Oct. 15, 1970, 84 Stat. 928; Pub. L. 93–463, title I, § 103(a), (b), (d), (e), title II, §§ 204(b), 205(b), 212(a)(1), (2), title IV, § 408, Oct. 23, 1974, 88 Stat. 1392, 1397, 1400, 1403, 1414; Pub. L. 95–405, § 13(3), Sept. 30, 1978, 92 Stat. 871; Pub. L. 97–444, title II, § 219, Jan. 11, 1983, 96 Stat. 2308; Pub. L. 99–641, title I, § 103, Nov. 10, 1986, 100 Stat. 3557; renumbered § 6(c) and amended Pub. L. 102–546, title II, §§ 209(a)(1), 212(b), 223, title III, § 301, title IV, § 402(1)(C), (6), (7), (9)(B), Oct. 28, 1992, 106 Stat. 3606, 3609, 3617, 3622, 3624, 3625; Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(12)(C)], Dec. 21, 2000, 114 Stat. 2763, 2763A–409; Pub. L. 110–234, title XIII, § 13103(a), May 22, 2008, 122 Stat. 1433; Pub. L. 110–246, § 4(a), title XIII, § 13103(a), June 18, 2008, 122 Stat. 1664, 2195; Pub. L. 111–203, title VII, §§ 741(b)(3), 753(a), July 21, 2010, 124 Stat. 1731, 1750.)

cite as: 7 USC 9