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7 U.S.C. § 6b — Contracts designed to defraud or mislead
Federal law — U.S. Code and appendices · legal_authorities
**(a) Unlawful actions** It shall be unlawful—
(1) for any person, in or in connection with any order to make, or the making of, any contract of sale of any commodity in interstate commerce or for future delivery that is made, or to be made, on or subject to the rules of a designated contract market, for or on behalf of any other person; or
(2) for any person, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery, or swap, that is made, or to be made, for or on behalf of, or with, any other person, other than on or subject to the rules of a designated contract market—
(A) to cheat or defraud or attempt to cheat or defraud the other person;
(B) willfully to make or cause to be made to the other person any false report or statement or willfully to enter or cause to be entered for the other person any false record;
(C) willfully to deceive or attempt to deceive the other person by any means whatsoever in regard to any order or contract or the disposition or execution of any order or contract, or in regard to any act of agency performed, with respect to any order or contract for or, in the case of paragraph (2), with the other person; or
(D)
(i) to bucket an order if the order is either represented by the person as an order to be executed, or is required to be executed, on or subject to the rules of a designated contract market; or
(ii) to fill an order by offset against the order or orders of any other person, or willfully and knowingly and without the prior consent of the other person to become the buyer in respect to any selling order of the other person, or become the seller in respect to any buying order of the other person, if the order is either represented by the person as an o
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Source file: Laws/federal/codes/united-states-code/title-7/section-6b-contracts-designed-to-defraud-or-mislead--109cf811ff.md
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Source location: Title 7, Chapter 1, § 6b; chapter-001-commodity-exchanges.md
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**(a) Unlawful actions** It shall be unlawful—
(1) for any person, in or in connection with any order to make, or the making of, any contract of sale of any commodity in interstate commerce or for future delivery that is made, or to be made, on or subject to the rules of a designated contract market, for or on behalf of any other person; or
(2) for any person, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery, or swap, that is made, or to be made, for or on behalf of, or with, any other person, other than on or subject to the rules of a designated contract market—
(A) to cheat or defraud or attempt to cheat or defraud the other person;
(B) willfully to make or cause to be made to the other person any false report or statement or willfully to enter or cause to be entered for the other person any false record;
(C) willfully to deceive or attempt to deceive the other person by any means whatsoever in regard to any order or contract or the disposition or execution of any order or contract, or in regard to any act of agency performed, with respect to any order or contract for or, in the case of paragraph (2), with the other person; or
(D)
(i) to bucket an order if the order is either represented by the person as an order to be executed, or is required to be executed, on or subject to the rules of a designated contract market; or
(ii) to fill an order by offset against the order or orders of any other person, or willfully and knowingly and without the prior consent of the other person to become the buyer in respect to any selling order of the other person, or become the seller in respect to any buying order of the other person, if the order is either represented by the person as an order to be executed, or is required to be executed, on or subject to the rules of a designated contract market unless the order is executed in accordance with the rules of the designated contract market.
**(b) Clarification** Subsection (a)(2) of this section shall not obligate any person, in or in connection with a transaction in a contract of sale of a commodity for future delivery, or swap, with another person, to disclose to the other person nonpublic information that may be material to the market price, rate, or level of the commodity or transaction, except as necessary to make any statement made to the other person in or in connection with the transaction not misleading in any material respect.
**(c) Buying and selling orders for commodity** Nothing in this section or in any other section of this chapter shall be construed to prevent a futures commission merchant or floor broker who shall have in hand, simultaneously, buying and selling orders at the market for different principals for a like quantity of a commodity for future delivery in the same month executing such buying and selling orders at the market price: Provided, That any such execution shall take place on the floor of the exchange where such orders are to be executed at public outcry across the ring and shall be duly reported, recorded, and cleared in the same manner as other orders executed on such exchange: And provided further, That such transactions shall be made in accordance with such rules and regulations as the Commission may promulgate regarding the manner of the execution of such transactions.
**(d) Inapplicability to transactions on foreign exchanges** Nothing in this section shall apply to any activity that occurs on a board of trade, exchange, or market, or clearinghouse for such board of trade, exchange, or market, located outside the United States, or territories or possessions of the United States, involving any contract of sale of a commodity for future delivery that is made, or to be made, on or subject to the rules of such board of trade, exchange, or market.
**(e) Contracts of sale on group or index of securities** It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails, or of any facility of any registered entity, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery (or option on such a contract), or any swap, on a group or index of securities (or any interest therein or based on the value thereof)—
(1) to employ any device, scheme, or artifice to defraud;
(2) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or
(3) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
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Federal law — U.S. Code and appendices · legal_authorities
This chapter may be cited as the “Commodity Exchange Act.”
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Federal law — U.S. Code and appendices · legal_authorities
As used in this chapter:
(1) **Alternative trading system** — The term “alternative trading system” means an organization, association, or group of persons that—
(A) is registered as a broker or dealer pursuant to section 15(b) of the Securities Exchange Act of 1934 [[15 U.S.C. 78](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78&num=0&edition=prelim)o(b)] (except paragraph (11) thereof);
(B) performs the functions commonly performed by an exchange (as defined in section 3(a)(1) of the Securities Exchange Act of 1934 [[15 U.S.C. 78c(a)(1)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78c/a/1&num=0&edition=prelim)]);
(C) does not—
(i) set rules governing the conduct of subscribers other than the conduct of such subscribers’ trading on the alternative trading system; or
(ii) discipline subscribers other than by exclusion from trading; and
(D) is exempt from the definition of the term “exchange” under such section 3(a)(1) [[15 U.S.C. 78c(a)(1)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78c/a/1&num=0&edition=prelim)] by rule or regulation of the Securities and Exchange Commission on terms that require compliance with regulations of its trading functions.
(2) **Appropriate Federal banking agency** — The term “appropriate Federal banking agency”—
(A) has the meaning given the term in [section 1813 of title 12](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim);
(B) means the Board in the case of a noninsured State bank; and
(C) is the Farm Credit Administration for farm credit system institutions.
(3) **Associated person of a security-based swap dealer or major security-based swap participant** — T
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 1a
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Jurisdiction of Commission; Commodity Futures Trading Commission**
(1) **Jurisdiction of Commission**
(A) *In general* — The Commission shall have exclusive jurisdiction, except to the extent otherwise provided in the Wall Street Transparency and Accountability Act of 2010 (including an amendment made by that Act) and subparagraphs (C), (D), and (I) of this paragraph and subsections (c) and (f), with respect to accounts, agreements (including any transaction which is of the character of, or is commonly known to the trade as, an “option”, “privilege”, “indemnity”, “bid”, “offer”, “put”, “call”, “advance guaranty”, or “decline guaranty”), and transactions involving swaps or contracts of sale of a commodity for future delivery (including significant price discovery contracts), traded or executed on a contract market designated pursuant to [section 7 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section7&num=0&edition=prelim) or a swap execution facility pursuant to [section 7b–3 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section7b-3&num=0&edition=prelim) or any other board of trade, exchange, or market, and transactions subject to regulation by the Commission pursuant to [section 23 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section23&num=0&edition=prelim). Except as hereinabove provided, nothing contained in this section shall (I) supersede or limit the jurisdiction at any time conferred on the Securities and Exchange Commission or other regulatory authorities under the laws of the United States or of any State, or (II) restrict the Securities and Exchange Commission and such other authorities from carrying out their duties and responsibilities in
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Definitions** In this section:
(1) **Agricultural commodity** — The term “agricultural commodity” has the meaning given the term in [section 5602 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section5602&num=0&edition=prelim).
(2) **Geographically disadvantaged farmer or rancher** — The term “geographically disadvantaged farmer or rancher” has the meaning given the term in section 10906(a) of the Farm Security and Rural Investment Act of 2002 ([7 U.S.C. 2204](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section2204&num=0&edition=prelim) note; Public Law 107–171).
**(b) Authorization** Subject to the availability of funds under subsection (d), the Secretary may provide geographically disadvantaged farmers or ranchers direct reimbursement payments for activities described in subsection (c).
**(c) Transportation**
(1) **In general** — Subject to paragraphs (2) and (3), the Secretary may provide direct reimbursement payments to a geographically disadvantaged farmer or rancher to transport an agricultural commodity, or inputs used to produce an agricultural commodity, during a fiscal year.
(2) **Proof of eligibility** — To be eligible to receive assistance under paragraph (1), a geographically disadvantaged farmer or rancher shall demonstrate to the Secretary that transportation of the agricultural commodity or inputs occurred over a distance of more than 30 miles, as determined by the Secretary.
(3) **Amount**
(A) *In general* — Subject to paragraph (2), the amount of direct reimbursement payments made to a geographically disadvantaged farmer or rancher under this section for a fiscal year shall equal the product obtained by multiplying—
(i) the amount of costs incurred by the geographically di
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general**
(1) **Prohibition** — It shall be unlawful for any person to offer to enter into, enter into, or confirm the execution of a transaction described in paragraph (2) involving the purchase or sale of any commodity for future delivery (or any option on such a transaction or option on a commodity) or swap if the transaction is used or may be used to—
(A) hedge any transaction in interstate commerce in the commodity or the product or byproduct of the commodity;
(B) determine the price basis of any such transaction in interstate commerce in the commodity; or
(C) deliver any such commodity sold, shipped, or received in interstate commerce for the execution of the transaction.
(2) **Transaction** — A transaction referred to in paragraph (1) is a transaction that—
(A)
(i) is, of the character of, or is commonly known to the trade as, a “wash sale” or “accommodation trade”; or
(ii) is a fictitious sale; or
(B) is used to cause any price to be reported, registered, or recorded that is not a true and bona fide price.
(3) **Contract of sale** — It shall be unlawful for any employee or agent of any department or agency of the Federal Government or any Member of Congress or employee of Congress (as such terms are defined under section 2 of the STOCK Act) or any judicial officer or judicial employee (as such terms are defined, respectively, under section 2 of the STOCK Act) who, by virtue of the employment or position of the Member, officer, employee or agent, acquires information that may affect or tend to affect the price of any commodity in interstate commerce, or for future delivery, or any swap, and which information has not been disseminated by the department or agency of the Federal Government holding or creating the information or b
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Federal law — U.S. Code and appendices · legal_authorities
Page 52
TITLE 7—AGRICULTURE
§ 6b
section shall apply to transactions or positions which
are shown to be bona fide hedging transactions or posi-
tions as such terms shall be defined by the Commission
by rule, regulation, or order consistent with the pur-
poses of this chapter’’ for ‘‘No order issued under para-
graph (1) of this section shall apply to transactions or
positions which are shown to be bona fide hedging
transactions or positions as such terms shall be defined
by the Commission within one hundred and eighty days
after the effective date of the Commodity Futures
Trading Commission Act of 1974 by order consistent
with the purposes of this chapter’’ and inserted ‘‘Such
terms may be defined to permit producers, purchasers,
sellers, middlemen, and users of a commodity or a
product derived therefrom to hedge their legitimate an-
ticipated business needs for that period of time into the
future for which an appropriate futures contract is
open and available on an exchange. To determine the
adequacy of this chapter and the powers of the Com-
mission acting thereunder to prevent unwarranted
price pressures by large hedgers, the Commission shall
monitor and analyze the trading activities of the larg-
est hedgers, as determined by the Commission, oper-
ating in the cattle, hog, or pork belly markets and
shall report its findings and recommendations to the
Senate Committee on Agriculture, Nutrition, and For-
estry and the House Committee on Agriculture in its
annual reports for at least two years following January
11, 1983.’’
Par. (4). Pub. L. 97–444, § 205(5), substituted ‘‘a futures
commission merchant, an introducing broker, or a floor
broker’’ for ‘‘a futures commission merchant or as floor
broker’’.
Par. (5). Pub. L. 97–444, § 205(6), added p
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