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7 U.S.C. § 13a–1Enjoining or restraining violations

submitted 104 years ago by Pub. L. 93-463 to r/title-7-AGRICULTURE · 834 words · no verdicts yet

in plain englishAI-generated · not legal advice

The Commission can sue in federal court to stop violations of commodities law, and courts can grant injunctions, mandamus orders, and civil penalties of up to $100,000 or triple the gain per violation, or up to $1,000,000 for manipulation. Courts can also order restitution and disgorgement. The Commission can ask the Attorney General to sue instead, and must tell the SEC about certain enforcement actions.

This section gives the Commission its main tool for going to court against violators. (a) The Commission can sue in the proper U.S. district or territorial court whenever it appears a registered entity or other person has violated, is violating, or is about to violate this chapter or a Commission rule, or is improperly restraining commodity or swap trading. The Commission can ask the court to stop that conduct or force compliance, and the courts have jurisdiction to hear these suits. Normally, no restraining order or injunction under this chapter can be issued without notice to the other side first — except for orders stopping someone from destroying or altering records, or blocking Commission inspectors; orders stopping someone from moving or hiding funds or assets; and orders appointing a temporary receiver to help enforce those. (b) If the Commission properly shows its case, the court grants a permanent or temporary injunction or restraining order without requiring a bond. (c) On the Commission's request, these same courts can also issue writs of mandamus, or similar orders, making someone comply with this chapter or a Commission rule or order — including taking action to remove the danger of a violation. These writs, too, cannot be issued without notice. (d) Civil penalties. (1) In any such lawsuit, the court can impose a civil penalty on anyone found to have committed a violation: the greater of $100,000 or triple their financial gain, per violation, or, for manipulation-type violations under sections 9, 15, 13b, or 13(a)(2), the greater of $1,000,000 or triple their gain, per violation. (2) If someone does not pay a penalty by the court's deadline, the Commission can ask the Attorney General to collect it by suing in the right district court. (3) The court can also order equitable remedies: restitution to people who lost money because of the violation, in the amount of their losses, and disgorgement of any gains connected to the violation. (e) A lawsuit under this section can be filed in the district where the defendant is found, lives, or does business, or where the violation happened, is happening, or is about to happen; papers can be served on the defendant wherever they are found. (f) Instead of suing itself, the Commission can ask the Attorney General to bring the suit. (g) When the Commission does sue itself, it must tell the Attorney General about the suit and keep the Attorney General updated on developments. (h) The Commission must notify the Securities and Exchange Commission when it starts a proceeding, and give it a copy of any order, against certain registered or exempt futures professionals or contract markets.
the actual law source: uscode.house.gov ↗public domain
(a) Action to enjoin or restrain violations

Whenever it shall appear to the Commission that any registered entity or other person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule, regulation, or order thereunder, or is restraining trading in any commodity for future delivery or any swap, the Commission may bring an action in the proper district court of the United States or the proper United States court of any territory or other place subject to the jurisdiction of the United States, to enjoin such act or practice, or to enforce compliance with this chapter, or any rule, regulation or order thereunder, and said courts shall have jurisdiction to entertain such actions: Provided, That no restraining order (other than a restraining order which prohibits any person from destroying, altering or disposing of, or refusing to permit authorized representatives of the Commission to inspect, when and as requested, any books and records or other documents or which prohibits any person from withdrawing, transferring, removing, dissipating, or disposing of any funds, assets, or other property, and other than an order appointing a temporary receiver to administer such restraining order and to perform such other duties as the court may consider appropriate) or injunction for violation of the provisions of this chapter shall be issued ex parte by said court.

(b) Injunction or restraining order

Upon a proper showing, a permanent or temporary injunction or restraining order shall be granted without bond.

(c) Writs or other orders

Upon application of the Commission, the district courts of the United States and the United States courts of any territory or other place subject to the jurisdiction of the United States shall also have jurisdiction to issue writs of mandamus, or orders affording like relief, commanding any person to comply with the provisions of this chapter or any rule, regulation, or order of the Commission thereunder, including the requirement that such person take such action as is necessary to remove the danger of violation of this chapter or any such rule, regulation, or order: Provided, That no such writ of mandamus, or order affording like relief, shall be issued ex parte.

(d) Civil penalties
(1)In general.—

In any action brought under this section, the Commission may seek and the court shall have jurisdiction to impose, on a proper showing, on any person found in the action to have committed any violation—

(A)

a civil penalty in the amount of not more than the greater of $100,000 or triple the monetary gain to the person for each violation; or

(B)

in any case of manipulation or attempted manipulation in violation of section 9, 15, 13b, or 13(a)(2) of this title, a civil penalty in the amount of not more than the greater of $1,000,000 or triple the monetary gain to the person for each violation.

(2)

If a person on whom such a penalty is imposed fails to pay the penalty within the time prescribed in the court’s order, the Commission may refer the matter to the Attorney General who shall recover the penalty by action in the appropriate United States district court.

(3)Equitable remedies.—

In any action brought under this section, the Commission may seek, and the court may impose, on a proper showing, on any person found in the action to have committed any violation, equitable remedies including—

(A)

restitution to persons who have sustained losses proximately caused by such violation (in the amount of such losses); and

(B)

disgorgement of gains received in connection with such violation.

(e) Venue and process

Any action under this section may be brought in the district wherein the defendant is found or is an inhabitant or transacts business or in the district where the act or practice occurred, is occurring, or is about to occur, and process in such cases may be served in any district in which the defendant is an inhabitant or wherever the defendant may be found.

(f) Action by Attorney General

In lieu of bringing actions itself pursuant to this section, the Commission may request the Attorney General to bring the action.

(g) Notice to Attorney General of action brought by Commission

Where the Commission elects to bring the action, it shall inform the Attorney General of such suit and advise him of subsequent developments.

(h) Notice of investigations and enforcement actions

The Commission shall provide the Securities and Exchange Commission with notice of the commencement of any proceeding and a copy of any order entered by the Commission against any futures commission merchant or introducing broker registered pursuant to section 6f(a)(2) of this title, any floor broker or floor trader exempt from registration pursuant to section 6f(a)(3) of this title, any associated person exempt from registration pursuant to section 6k(6) of this title, or any board of trade designated as a contract market pursuant to section 7b–1 of this title.

Source credit: (Sept. 21, 1922, ch. 369, § 6c, as added Pub. L. 93–463, title II, § 211, Oct. 23, 1974, 88 Stat. 1402; amended Pub. L. 97–444, title II, § 220, Jan. 11, 1983, 96 Stat. 2308; Pub. L. 99–641, title I, § 104, Nov. 10, 1986, 100 Stat. 3557; Pub. L. 102–546, title II, § 221, Oct. 28, 1992, 106 Stat. 3614; Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(15), title II, § 253(c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–409, 2763A–449; Pub. L. 110–234, title XIII, § 13103(c), May 22, 2008, 122 Stat. 1434; Pub. L. 110–246, § 4(a), title XIII, § 13103(c), June 18, 2008, 122 Stat. 1664, 2196; Pub. L. 111–203, title VII, §§ 741(b)(5), 744, July 21, 2010, 124 Stat. 1731, 1735.)

history & why it existsrecord from the source credit
  • 1922Enacted · Pub. L. 93-463 · 88 Stat. 1402
  • 1983Amended · Pub. L. 97-444 · 96 Stat. 2308
  • 1986Amended · Pub. L. 99-641 · 100 Stat. 3557
  • 1992Amended · Pub. L. 102-546 · 106 Stat. 3614
  • 2000Amended · Pub. L. 106-554 · 114 Stat. 2763, 2763
  • 2008Amended · Pub. L. 110-234 · 122 Stat. 1434
  • 2008Amended · Pub. L. 110-246 · 122 Stat. 1664, 2196
  • 2010Amended · Pub. L. 111-203 · 124 Stat. 1731, 1735

A history note hasn’t been published yet. The record shows enactment by Pub. L. 93-463 on 1922-09-21.

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