Commodity Futures Trading Commission v. Co Petro Marketing Group, Inc., a California Corporation Harold D. Goldstein and Michael Bradley Krivacek

Co Petro Marketing Group, Inc., and individual appellants, Harold Goldstein and Michael Krivacek, 1 (Co Petro) appeal from an *576 order of the district court, 502 F.Supp. 806 , permanently enjoining them from offering, selling, or otherwise engaging in futures contracts in petroleum products, in violation of §§ 4 and 4h of the Commodity Exchange A.ct, as amended, (the Act), 7 U.S.C. §§ 6 , 6h (1976). Co Petro contends that the contracts it sold were not subject to the Act. Co Petro also appeals from the district court’s award of relief ancillary to the permanent injunction. The district court appointed a receiver, ordered Co Petro to permit the receiver access to the firm’s books and records, ordered an accounting, and generally ordered the disgorgement of unlawfully obtained funds. Co Petro further assigns as error the district court’s taking judicial notice of three prior proceedings against defendant Goldstein. We affirm the district court’s judgment that Co Petro was offering and selling “contracts of sale of a commodity for future delivery” (futures contracts) within the meaning of section 2(a)(1) of the Act, 7 U.S.C. § 2 (1976). We also agree with the district court that Co…

dissenting.

I dissent.

In my opinion it was not proved that the defendants violated either Sections 4 or 4h ( 7 U.S.C. §§ 6 and 6h) of the Commodity Exchange Act ( 7 U.S.C. §§ 1-24 ) and are, under the facts shown, subject to the jurisdiction of the Commodity Futures Commission, which was established by the Act of October 23, 1974, Pub.L. 93-463, 88 Stat. 1389.

I turn first to that portion of Section 4 relating to boards of trade ( 7 U.S.C. § 6 ). Section 4 of the Act forbids the doing of certain acts in connection with “any contract of sale of commodity for future delivery on or subject to the rules of any board of trade in the United States.” Section 2(a)(1) of the Act ( 7 U.S.C. § 2 ) defines “board of trade” as follows: “The words ‘board of trade’ shall be held to include and mean any exchange or association, whether incorporated or unincorporated, of persons who shall be engaged in the business of buying or selling commodity or receiving the same for sale on consignment.” This definition, with the exception that the word “commodity” has been substituted for the word “grain,” is the exact definition appearing in the Futures Trading Act, ch. 86, § 2, 42 Stat. 187 (1921), and…

680 F.2d 573 10 Fed. R. Evid. Serv. 1494 COMMODITY FUTURES TRADING COMMISSION, Plaintiff-Appellee, v. CO PETRO MARKETING GROUP, INC., a California corporation; Harold D. Goldstein; and Michael Bradley Krivacek, Defendants-Appellants. No. 80-5370. United States Court of Appeals, Ninth Circuit. Argued and Submitted Nov. 5, 1981. Decided June 28, 1982. Anthony Murray, Ball, Hunt, Hart, Brown & Baerwitz, Long Beach, Cal., for defendants-appellants. David R. Merrill, Washington, D. C., argued, for plaintiff-appellee; Gregory C. Glynn, Washington, D. C., on brief. Appeal from the United States District Court for the Central District of California. Before CANBY and NORRIS, Circuit Judges and SMITH, District Judge. * CANBY, Circuit Judge: 1 Co Petro Marketing Group, Inc., and individual appellants, Harold Goldstein and Michael Krivacek, 1 (Co Petro) appeal from an order of the district court, 502 F.Supp. 806 , permanently enjoining them from offering, selling, or otherwise engaging in futures contracts in petroleum products, in violation of §§ 4 and 4h of the Commodity Exchange Act, as amended, (the Act), 7 U.S.C. §§ 6 , 6h (1976). Co Petro contends that the…