Andy Saberi v. Commodity Futures Trading Commission

We are called upon to decide whether a rule of a commodity exchange can form the basis of federal agency action to punish its violation. If so, was the agency finding proper, under the circumstances?

Petitioner Andy Saberi (“Saberi”) intentionally violated Chicago Mercantile Exchange (“CME”) Rule 8302.E, a speculative position limit rule. The Commodity Futures Trading Commission (“CFTC”) determined Saberi’s violation of CME Rule 8302.E was a violation of 7 U.S.C. § 6a(e) (“§ 6a(e)”) and imposed a cease and desist order, a $110,000 fine, and banned Saberi from trading on all exchanges under CFTC control for 30 days. Contrary to Saberi’s contention in his petition for review, CME Rule 443 does not limit the CFTC’s ability to impose sanctions for a violation of § 6a(e). Further, contrary to Saberi’s contention, the CFTC’s imposition of sanctions does not violate due process. We deny the petition.

I.

The CME is the sole American market for frozen pork belly futures. CME Rule 8302.E restricts the number of open exec-utory futures contracts (or “positions”) a speculative trader may possess for a given commodity at a given time. The purpose of this limit is to prevent market…