Commodity Futures Trading Commission v. Frankwell Bullion Ltd.

Plaintiff-appellant Commodity Futures Trading Commission (“CFTC”) appeals the summary judgment granted in favor of defendant-appellee Frankwell Bullion, Ltd. and its affiliates (“Frankwell”). The district court held that Frankwell was exempted from the jurisdiction of the CFTC by the so-called “Treasury Amendment” to the Commodity Exchange Act (“CEA”) because it was not a “board of trade” within the meaning of that amendment. We affirm that ruling of the district court.

The CFTC also appeals the district court’s imposition of receivership fees upon the CFTC. We affirm that ruling as well.

Factual and Procedural Background

Frankwell Bullion, Ltd., a Hong Kong corporation established in 1987, offers foreign currency transactions to the general U.S. public through several American-based affiliates. Neither Frankwell nor its affiliates have registered with the CFTC nor sought contract market designation. Nor are they subject to the regulatory jurisdiction of the Treasury Department or any federal bank regulatory agency.

Frankwell sold' standardized lots of various foreign currencies, each worth approximately $100,000. The customer could open either “long” or “short” positions in…