7 U.S.C. § 13b — Manipulations or other violations; cease

Page 123 TITLE 7—AGRICULTURE § 13b all suits in equity and actions at law brought under this section to enforce any liability or duty created by this chapter or any rule, regula- tion, or order of the Commission thereunder, or to obtain damages or other relief with respect thereto. Upon proper application, such courts shall also have jurisdiction to issue writs of mandamus, or orders affording like relief, com- manding the defendant to comply with the pro- visions of this chapter or any rule, regulation, or order of the Commission thereunder, includ- ing the requirement that the defendant take such action as is necessary to remove the danger of violation of this chapter or of any such rule, regulation, or order. Upon a proper showing, a permanent or temporary injunction or restrain- ing order shall be granted without bond. (3) Immediately upon instituting any such suit or action, the State shall serve written notice thereof upon the Commission and provide the Commission with a copy of its complaint, and the Commission shall have the right to (A) in- tervene in the suit or action and, upon doing so, shall be heard on all matters arising therein, and (B) file petitions for appeal. (4) Any suit or action brought under this sec- tion in a district court of the United States may be brought in the district wherein the defendant is found or is an inhabitant or transacts busi- ness or wherein the act or practice occurred, is occurring, or is about to occur, and process in such cases may be served in any district in which the defendant is an inhabitant or wher- ever the defendant may be found. (5) For purposes of bringing any suit or action under this section, nothing in this chapter shall prevent the attorney general, the administrator of the State securities laws, or other duly au- thorized State officials from exercising the pow- ers conferred on them by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence. (6) For purposes of this section, ‘‘State’’ means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States. (7) Nothing contained in this section shall pro- hibit an authorized State official from pro- ceeding in State court on the basis of an alleged violation of any general civil or criminal anti- fraud statute of such State. (8)(A) Nothing in this chapter shall prohibit an authorized State official from proceeding in a State court against any person registered under this chapter (other than a floor broker, floor trader, or registered futures association) for an alleged violation of any antifraud provision of this chapter or any antifraud rule, regulation, or order issued pursuant to the chapter. (B) The State shall give the Commission prior written notice of its intent to proceed before in- stituting a proceeding in State court as de- scribed in this subsection and shall furnish the Commission with a copy of its complaint imme- diately upon instituting any such proceeding. The Commission shall have the right to (i) inter- vene in the proceeding and, upon doing so, shall be heard on all matters arising therein, and (ii) file a petition for appeal. The Commission or the defendant may remove such proceeding to the district court of the United States for the proper district by following the procedure for removal otherwise provided by law, except that the peti- tion for removal shall be filed within sixty days after service of the summons and complaint upon the defendant. The Commission shall have the right to appear as amicus curiae in any such proceeding. (Sept. 21, 1922, ch. 369, § 6d, as added Pub. L. 95–405, § 15, Sept. 30, 1978, 92 Stat. 872; amended Pub. L. 97–444, title II, § 221, Jan. 11, 1983, 96 Stat. 2308; Pub. L. 102–546, title II, § 207(b)(1), (2), Oct. 28, 1992, 106 Stat. 3604; Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(16)], Dec. 21, 2000, 114 Stat. 2763, 2763A–409.) Editorial Notes AMENDMENTS 2000—Par. (1). Pub. L. 106–554 inserted ‘‘derivatives transaction execution facility,’’ after ‘‘contract mar- ket,’’. 1992—Pars. (1), (8)(A). Pub. L. 102–546 inserted ref- erence to floor trader. 1983—Par. (8). Pub. L. 97–444 added par. (8). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1992 AMENDMENT Amendment by Pub. L. 102–546 effective 180 days after Oct. 28, 1992, with Commodity Futures Trading Com- mission to issue any regulations necessary to imple- ment such amendment no later than 180 days after Oct. 28, 1992, see section 207(c) of Pub. L. 102–546, set out as a note under section 6e of this title. EFFECTIVE DATE OF 1983 AMENDMENT Amendment by Pub. L. 97–444 effective Jan. 11, 1983, see section 239 of Pub. L. 97–444, set out as a note under section 2 of this title. EFFECTIVE DATE Section effective Oct. 1, 1978, see section 28 of Pub. L. 95–405, set out as an Effective Date of 1978 Amendment note under section 2 of this title. § 13b. Manipulations or other violations; cease and desist orders against persons other than registered entities; punishment If any person (other than a registered entity), is violating or has violated section 9 of this title or any other provisions of this chapter or of the rules, regulations, or orders of the Commission thereunder, the Commission may, upon notice and hearing, and subject to appeal as in other cases provided for in section 9 of this title, make and enter an order directing that such person shall cease and desist therefrom and, if such per- son thereafter and after the lapse of the period allowed for appeal of such order or after the af- firmance of such order, shall knowingly fail or refuse to obey or comply with such order, such person, upon conviction thereof, shall be fined not more than the higher of $140,000 or triple the monetary gain to such person, or imprisoned for not more than 1 year, or both, except that if such knowing failure or refusal to obey or com- ply with such order involves any offense within subsection (a) or (b) of section 13 of this title, such person, upon conviction thereof, shall be subject to the penalties of said subsection (a) or Page 124 TITLE 7—AGRICULTURE § 13c 1 So in original. The words ‘‘or the Commission’’ probably should not appear. (b): Provided, That any such cease and desist order under this section against any respondent in any case of manipulation shall be issued only in conjunction with an order issued against such respondent under section 9 of this title. (Sept. 21, 1922, ch. 369, § 6(d), formerly § 6(c), as added Pub. L. 90–258, § 17, Feb. 19, 1968, 82 Stat. 31; amended Pub. L. 93–463, title I, § 103(a), (b), title II, § 212(c), Oct. 23, 1974, 88 Stat. 1392, 1404; renumbered § 6(d) and amended Pub. L. 102–546, title II, §§ 209(a)(1), (4), 212(b), Oct. 28, 1992, 106 Stat. 3606, 3609; Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(12)(D)], Dec. 21, 2000, 114 Stat. 2763, 2763A–409; Pub. L. 111–203, title VII, §§ 741(b)(4), 753(b), July 21, 2010, 124 Stat. 1731, 1753.) Editorial Notes CODIFICATION Section is comprised of subsec. (d) of section 6 of act Sept. 21, 1922. Subsecs. (a) and (b) of section 6 are classi- fied to section 8 of this title. Subsec. (c) of section 6 is classified to section 9 of this title. Subsecs. (e), (f), and (g) of section 6 are classified to sections 9a, 9b, and 9c of this title, respectively. AMENDMENTS 2010—Pub. L. 111–203, § 753(b), amended section gen- erally. Prior to amendment, text read as follows: ‘‘If any person (other than a registered entity) is manipu- lating or attempting to manipulate or has manipulated or attempted to manipulate the market price of any commodity, in interstate commerce, or for future de- livery on or subject to the rules of any registered enti- ty, or of any swap, or otherwise is violating or has vio- lated any of the provisions of this chapter or of the rules, regulations, or orders of the Commission or the commission thereunder, the Commission may, upon no- tice and hearing, and subject to appeal as in other cases provided for in sections 9 and 15 of this title, make and enter an order directing that such person shall cease and desist therefrom and, if such person thereafter and after the lapse of the period allowed for appeal of such order or after the affirmance of such order, shall fail or refuse to obey or comply with such order, such person shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than the higher of $100,000 or triple the monetary gain to such person, or imprisoned for not less than six months nor more than one year, or both, except that if such failure or refusal to obey or comply with such order involves any offense within paragraph (a) or (b) of section 13 of this title, such person shall be guilty of a felony and, upon con- viction thereof, shall be subject to the penalties of said paragraph (a) or (b): Provided, That any such cease and desist order against any respondent in any case of ma- nipulation of, or attempt to manipulate, the price of any commodity shall be issued only in conjunction with an order issued against such respondent under sec- tions 9 and 15 of this title. Each day during which such failure or refusal to obey or comply with such order continues shall be deemed a separate offense.’’ Pub. L. 111–203, § 741(b)(4), inserted ‘‘or of any swap,’’ before ‘‘or otherwise is violating’’. 2000—Pub. L. 106–554 substituted ‘‘registered entity’’ for ‘‘contract market’’ in two places. 1992—Pub. L. 102–546 made technical amendment to references to sections 9 and 15 of this title to reflect change in reference to corresponding section of original act and substituted ‘‘the higher of $100,000 or triple the monetary gain to such person’’ for ‘‘$100,000’’. 1974—Pub. L. 93–463, §§ 103(a), 212(c), substituted ‘‘Commission’’ for ‘‘Secretary’’ before ‘‘may’’ and sub- stituted ‘‘not more than $100,000’’ for ‘‘not less than $500 nor more than $10,000’’. Pub. L. 93–463, § 103(a), provided for substitution of ‘‘Commission’’ for ‘‘Secretary of Agriculture’’ except where such words would be stricken by section 103(b), which directed striking the words ‘‘the Secretary of Agriculture or’’ where they appeared in the phrase ‘‘the Secretary of Agriculture or the Commission’’. Because the word ‘‘commission’’ was not capitalized in the text of this section, section 103(b) did not apply to this sec- tion and therefore section 103(a) was executed, result- ing in the substitution of ‘‘the Commission or the com- mission’’ for ‘‘the Secretary of Agriculture or the com- mission’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 741(b)(4) of Pub. L. 111–203 ef- fective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§ 711–754) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle A, see section 754 of Pub. L. 111–203, set out as a note under section 1a of this title. Amendment by section 753(b) of Pub. L. 111–203 effec- tive on the date on which the final rule promulgated by the Commodity Futures Trading Commission pursuant to Pub. L. 111–203 takes effect [see 76 F.R. 41398, effec- tive Aug. 15, 2011], see section 753(d) of Pub. L. 111–203, set out as a note under section 9 of this title. EFFECTIVE DATE OF 1974 AMENDMENT For effective date of amendment by Pub. L. 93–463, see section 418 of Pub. L. 93–463, set out as a note under section 2 of this title. EFFECTIVE DATE Section effective 120 days after Feb. 19, 1968, see sec- tion 28 of Pub. L. 90–258, set out as an Effective Date of 1968 Amendment note under section 2 of this title. § 13c. Responsibility as principal; minor viola- tions (a) Any person who commits, or who willfully aids, abets, counsels, commands, induces, or pro- cures the commission of, a violation of any of the provisions of this chapter, or any of the rules, regulations, or orders issued pursuant to this chapter, or who acts in combination or con- cert with any other person in any such viola- tion, or who willfully causes an act to be done or omitted which if directly performed or omitted by him or another would be a violation of the provisions of this chapter or any of such rules, regulations, or orders may be held responsible for such violation as a principal. (b) Any person who, directly or indirectly, controls any person who has violated any provi- sion of this chapter or any of the rules, regula- tions, or orders issued pursuant to this chapter may be held liable for such violation in any ac- tion brought by the Commission to the same ex- tent as such controlled person. In such action, the Commission has the burden of proving that the controlling person did not act in good faith or knowingly induced, directly or indirectly, the act or acts constituting the violation. (c) Nothing in this chapter shall be construed as requiring the Commission or the Commis- sion 1 to report minor violations of this chapter for prosecution, whenever it appears that the public interest does not require such action. (Sept. 21, 1922, ch. 369, § 13, as added Pub. L. 90–258, § 26, Feb. 19, 1968, 82 Stat. 34; amended