“The Commission’s objective was and continues to be the vigorous prosecution of retail forex fraud. We will continue to prove to each and every court that these perpetrators of fraud are engaging in illegal off-exchange forex futures contracts with retail customers.”
In Zelener, the CFTC alleged that the defendants committed fraud in the sale of off-exchange foreign currency (forex) futures contracts. The United States district court agreed that the Commission had presented proof that the defendants engaged in fraudulent sales, but dismissed the action based upon its determination that the transactions were spot transactions, not futures contracts, and thus beyond the jurisdictional reach of the Commodity Exchange Act. Subsequently, the U.S. Court of Appeals for the Seventh Circuit reviewed the case and agreed with the district court that the transactions were, in form, spot transactions.
Review by the U.S. Supreme Court in such cases is a matter of discretion for the Court and not a right. The U.S. Solicitor General is entrusted with authority to decide whether to seek such review on behalf of the United States. Consequently, the decision of the Solicitor General brings an end to the Zelener litigation.
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