*1 ly reasonable belief the vehicle Bears, Bull Ltd., & Bull & Bears a/k/a parked Thus, on the Patterson property. Investment, International Ltd.; Cur Patterson’s vehicle was scope within the rex International Corporation, Defen warrant, the search and the search of the dants, did not
vehicle violate the Fourth Amend- v. ment.
EBC Enterprises, Fulton Incorporated; Ralph Tyler, S. Parties Interest. III. No. 00-1488. sum, agents’ because the belief that United gravel parking States Court of part Appeals, area was Fourth property Patterson Circuit. objectively was an rea- one, sonable their interpretation of the Argued Nov. 2001. scope of the warrant to include Patterson’s vehicle, parked there, Decided Jan. was also objectively reasonable. Because
agents’ conduct atwas objectively times reasonable, we affirm the district court’s denying
order Patterson’s sup- motion to press firearm that was discovered in her vehicle.
AFFIRMED. COMMODITY FUTURES TRADING
COMMISSION, Plaintiff-
Appellee,
v. BARAGOSH, Esfand Esfandiar a/k/a Baragosh, Defendant-Appellant, Noble Wealth Data Information Ser
vices, Incorporated, a/k/a
Wealth, Incorporated, Nobel a/k/a Incorporated; International Investment(s), Advanced Incorporated; Development, Ltd.; Wealth
Judge joined. WILKINSON Judge WILLIAMS wrote an opinion concurring in part and concurring the judgment.
OPINION MOTZ,
DIANA GRIBBON Circuit Judge. 1998,
In
the Commodity Futures Trad-
ing
complaint
Commission filed a
alleging
that Esfand Baragosh was
controlling
a
person of Noble Wealth Data Information
Services and several
companies
related
(collectively
Wealth”),
“Noble
which oper-
ated as a sham futures
in
exchange
viola-
tion of the Commodity Exchange Act. See
(West
U.S.C.A.
seq.
1999),
et
amended
Commodity Futures Modern-
(CFMA),
ization Act
Pub.L. No.
(2000).1
114 Stat. 2763
The district court
entered a
judgment against
default
companies and subsequently
sum-
granted
Kaiser, Student,
ARGUED: Mаtthew G.
mary
Appellate
judgment
Litigation Program,
to the
Georgetown
against
University
Center,
D.C.,
Washington,
Law
Baragosh.
court
Baragosh
ordered
Appellant.
Godel,
for
C. Maria Dill
Office
$5,264,251
make
plus
restitution
pre-
General,
Commodity Futures Trad-
post-judgment interest,
and assessed a
Commission,
ing
D.C.,
Washington,
Ap-
for
penalty
$1,211,058
civil
plus
post-judg-
pellee.
Goldblatt,
ON BRIEF: Steven H.
against
ment interest
him. CFTC v. Noble
Director, Wendy Marantz,
M.
Supervising Wealth Data
Sys.,
Before Judge, Chief MOTZ, WILLIAMS and Judges. Circuit I. Affirmed in part and vacated incorporated which was in part by published
remanded opinion. Judge MOTZ opinion, wrote the in in California in desig- has never been enacted important several statute. We post-2000 also note the location changes to the CEA in 2000. See CFMA. statutory of each section the time we cite first noted, Unless otherwise all references and that section. citations to pre the CEA are to the enti- account opened Those market as a contract
nated floor,” “trading nor futures contracts use Noble Wealth’s currency tled to foreign the Commission set registered with mоnitors were computer ever where rows company In capacity. of various prices display current up to Atlanta, Georgia, and an office opened a a saw trader currencies. foreign When currency foreign operate began completed or she price, he desirable in this suit. at issue scam describing ticket order Noble Wealth an office by opening expanded the scam it sold, bought or to be contracts number expanded and it Bethesda, Maryland; traded, currency to be Duluth, office third again monitor. computer on the reflected price Georgia. *4 a ticket to Noble brought trader The victims, placed Noble Wealth To its lure “dealer”), (called a employee Wealth circulation general in ads “help wanted” a for HK called Noble Wealth assertedly “looking it claiming that was newspapers, quote to relayed the then quote and price con- to to trained become [persons] be for accepted If the trader the trader. invited replied Those who were sultants.” tick- completed the order the dealer price, ultimately en- and to visit Noble for the price in the execution by filling et training program. a to attend couraged issued Periodically, Noble Wealth trade. sessions, four consisted program statements, pur- which hours, during account detailed longer than two each no fees, commissions, and describing investment track videotapes ported to which mechanics and con- customer strategies in the value movements were Wealth currency through Noble tracts. they could told that Trainees were shown. hoax. Noble an elaborate This was account of opening an traders become brokerage licensed not a HK was Wealth Wealth, and Noble $10,000 or more with house, there is evidence and no families their urged to solicit were purchased actually Wealth “cus- and become open to accounts friends to corresponded currency contracts that of Noble tomers” Wealth. Rather, Baragosh as orders. customer appetites, Noble the trainees’ To whet the Com- hearing which testified at informing brochures distributed Wealth injunction, preliminary a sought mission returns had earned its traders them that its passed office Maryland Noble Wealth’s days, 192.5%in in a few high as 81.15% to currency orders traders’ contract months, and month, in three 906% one HK who dealer” at Noble Wealth “head ex- The brochures in six months. 532% sell buy and match attempted to customer returns exсeptional these plained words,. hour. In every had half other Noble Wealth orders because possible were mar- shop, the interbank tak- well-placed contacts a bucket operated Wealth buy-sell ket, to offer the “best allowing it order of a side customer’s ing opposite the world.” all over for clients quotation exe- competitively openly and rather than placed would be Assertedly, trades exchange. Noble order on cuting the Kong sub- Hong through Noble Wealth’s lost the bulk customers Wealth’s HK”), (“Noble which sidiary Wealth invested, diverted they funds Finan- a “licensed described brochures expenses, salaries operating pay daily turnovers Brokerage cial House commissions, personal expenses and the Finally, dollars.” 100 million excess employees. Noble Wealth ac- promised customer the brochures recruit- training and Baragosh oversaw by “highly overseen be counts would offices. Maryland Georgia ment consultants.” investment trained placed “help He Noble Wealth’s wanted standards set forth the Act. Two of ads,” appeared videos, training its those important standards are in this case. advising walked the floor the traders on First, the CEA contained anti-fraud “trade, strategy, and exhorted traders to measures designed protect both small trade, return, trade.” re- investors and the market as a whole. See personal ceived commission of two dol- 4b, 49 Stat. at (making it every lars for trade executed at Noble unlawful persons associated with a con- Wealth. tract defraud,” market to “cheat or “will- charged The Commission and the dis- fully to make or cause to be made ... any trict court that Baragosh found repоrt false or statement ... or false rec- (1) companies misappropriated ord,” had: cus- “willfully to deceive or attempt tomer funds and committed fraud in viola- whatsoever”). deceive ... by any means (2) 6b(a)(i)-(iii); tion of 7 U.S.C. bucket- These measures complemented ed customer orders in violation of 7 strengthened U.S.C. existing provisions that al- 6b(a)(iv); offered to com- ready sell applied in grain modity futures contracts other on a than Act, markets. 5(c), See Grain Futures *5 board of designated trade as a 42 contract Stat. (requiring at 1000 contract mar- 6(a). in market violation of 7 U.S.C. kets adopt internal rules “preventing] Only Baragosh appeals. ... by dissemination any or board thereof, member of false misleading or or
II. knowingly inaccurate reports concerning crop or market information or conditions Baragosh’s principal contention ap- on that affect or tend to price affect the of peal that Congress is did not intend Noble grain”). admittedly Wealth’s fraudulent activities regulated by be Commodity Exchange Second, the CEA made unlawful it for (“CEA” Act”).
Act or Resolving “the any member of a contract market question requires an understanding of the 4b(D), “bucket” an order. See CEA 49 history CEA’s purpose. Stat. at “Bucketing” commonly by done shop”: a so-called “bucket a busi-
A. ness that allows speculate customers to on From its in enactment 1936 through all in movements commodity prices by enter- periods case, material to this ing the CEA into contracts with shop rather required futures contracts on certain com- than by finding a trading partner on the modities to only be on government- traded floor of exchange. an See Armando T. approved public exchangеs, termed “con- Belly, The Derivative Foreign Market in tract markets.” Commodity Exchange See Currencies and the Commodity Exchange Act, 74-675, 4,§ Pub.L. 1491, No. 49 Stat. Act—The Status Over-the-Counter Fu- of (1936), 1492 amending Act, Contracts, Grain 1455, Futures tures 71 Tul. L.Rev. 1473 67-331, 4, (1997). Pub.L. No. 42 effect, Stat. 998 In shop bucket “assumes (1922); 6(a) (West compare 7 U.S.C.A. the risk of transaction be 1999) (same). Stout, Lynn also A. See by assumed the market in exchange Why the Law Speculators: Hates Regula- transaction.” Id. Such are viable shops tion and Ordering Private long they Market so rough maintain a Derivatives, 701, OTC 48 Duke L.J. 722 balance buy between the value of their for (1999). markets, in turn, Contract sell contracts customers pay debts required to conduct business according they miscalculates, a shop owe. When
324 Belly, orange juice 1968.” to concentrated likely occurs, its owners inevitably Currencies, Foreign Market in Derivative Id. accounts. settling shop without close 1974, Congress By at 1475. Tul. L.Rev. 71 centu- the twentieth first decades In the importance “growing decided bucket disfavored law common ry, comprehensive merited futures markets” con- their to enforce refusing shops 93- S.Rep. No. regulation. regime many state speculators, tracts with 1974 (1974), reprinted 1131 pen- criminal imposed civil legislatures 5843, (noting 5858-60 U.S.C.C.A.N. Stout, shop operators. on bucket alties mar- futures important “many large and 48 Duke Speculators, Law Hates theWhy by the unregulated completely kets [we]re effectively law Federal at 721. L.J. the value and that Government” Federal grain futures shops from bucket banned “substantially already trading had futures Future see beginning of securities the value exceeded] 2(a), 4, No. Act, Pub.L. §§ Trading exchanges”). stock the various Act, 42 (1921); Futures Grain Stat. Therefore, modified legislature extended 998-1000, and the CEA Stat. First, respects. important in two commodity new to several prohibition jurisdiction expanded the CEA's Stein, Exchange L. markets. William “all other trading on to include futures Commodity Requirement Trading services, and all and articles goods 473, 486— Act, L.Rev. Exchange Vand. contracts rights interests shop history (reviewing of bucket (1988) or in the presently delivery are prohibition). Commodity Futures in.” dealt future anti-bucketing provi- Pub.L. Act Trading the CEA’s rules were 88 Stat. anti-fraud and its new sion *6 CEA) at 7 (currently codified (amending to they applied amended, so that la(3) (West Supp.2001)). Sec- U.S.C.A. with markets contract persons associated commission, ond, created new Congress a or in acting “in “any person[s]” to also but Trading Futures Commis- Commodity the make, the to any order or with connection to sion, power enforce with broad invested regulated in a contracts making of’ futures Pierce, Lynch, Fenner Act. See Merrill the the Act to amend An commodity. See Curran, Smith, 456 U.S. Inc. v. & 5(a)(2), Act, Exchange Commodity 365-66, 1825, 72 L.Ed.2d 102 S.Ct. (em- (1968) 90-258, 82 Stat. Pub.L. was the (noting added), relevant sections phasis codified investigate complaints authorized 6b(a)(i)-(iv). at 7 amended U.S.C.A. law; the for violations grant reparations com- time, of covered number the Over relief; supplement injunctive alter seek enlarged. When it was also modities rules; and “direct contract market’s applied only the CEA enacted in first action whatever market take contract agricultural in a few to futures markets necessary by Commis- deemed [was] butter, eggs, commodities, grain, such According to the emergency”). in an sion 3(a), 49 Stat. potatoes. Irish these Agriculture, on Committee House decades, next several Over the at 1491. in- “significantly were intended changes com- the Act’s reach expanded in the futures confidence public crease 1938; tops commodity: in by “wool modity protection the same by providing markets meal, cottonseed, oils, cottonseed commodity customers unregulated fats and to the regulated in com- soybean meal soybeans, is now afforded peanuts, No. H.R.Rep. 1955; and 1954; modity in customers.” 1940; onions wool (1974). 62at livestock, and frozen products, livestock Citing objective, same the Senate confuse traders in the informal dealer expressly foreign currency identified fu- market without improving market fairness trading activity tures as an it intended to or transparency. Id. at pro- 5888-89. To bring within the Act: tect this segment market, Treasury
While the futures markets a number proposed an amendment that would “make agricultural commodities have been clear” that jurisdiction Commission’s regulated in varying degrees since over forеign currency futures was limited many large and important futures mar- to “organized exchanges.” Id. at 5889. kets are completely unregulated by the suggested provided, amendment Federal Government. These include pertinent part, that “[njothing in this Act highly sensitive silver market shall be govern deemed to or in way and markets in a number applicable be to transactions in foreign person currencies. A trading in one of currency ... unless such transactions in- unregulated these futures markets volve the sale thereof for future delivery should receive protection the same af- conducted on a board of trade.” Id. forded to those regulated It appears that the Senate Committee markets. persuaded. Except “puts delete S.Rep. reprinted in 1974 and calls for securities” from list of added). U.S.C.C.A.N. exempted transactions, the Committeе ac- While pending, however, the bill was cepted proposed language without Department Treasury sent a letter to (so change that the text adopted has come the Senate jurisdiction Committee to be known as the “Treasury Amend- bill, over the expressing concern about the ment”). report, In its the Committee re- effect that CEA regulation could have on peatedly stated that the amendment was part one foreign currency futures protect intended to banks and other so- market. The letter advised the Commit- phisticated traders exempting all for- tee that: eign currency transactions not orga- on [vjirtually all foreign curren- nized exchanges: cies in the United States is carried *7 through an informal network of banks [T]he Committee amendment provides market, dealers. This dealer which that trading interbank of foreign curren- primarily banks, consists large of the specified cies and financial instruments proved has highly in efficient serving the subject is not regula- needs of international business in hedg- tion .... ing the risks that stem foreign from Id. at 5848. exchange rate partici- movements. The pants in this sophisticated market are Also, the Committee included institutions, and informed unlike the amendment to clarify that provisions participants on organized exchanges, of the bill are not applicable to trading which, cases, in some include individuals in foreign currencies certain enu- and small traders may who need to be merated financial instruments unless protected by some governmental form of such trading is on a formally conducted regulation. organized exchange. great A futures Id. at (emphasis 5887-88 in original). deal of in foreign currency
Treasury argued regulation by that the United States is out through carried new Commission burden and an informal network of banks tell- periods, Thus, relevant during all trade.” that this believes Committee
ers. “board term by provided supervised the statute properly is more market that, or associa- “any exchange agencies trade” meant regulatory of the bank legisla- unincorpo- this or therefore, incorporated under regulation tion, whether unnecessary. engaged rated, is who persons tion of any commodi- selling Likewise, buying believes Committee of or business of trans- on con- the Commission for sale by receiving the same regulation or ty la(l) (West instru- specified financial in the actions 7 U.S.C.A. signment.” la(2) between ..., generally are ments 1999), by 7 U.S.C.A. amended institu- sophisticated other banks Future Trad- (West Compare Supp.2001). unnecessary, un- is participants, tional (CEA prede- Act, 42 Stat. ing organized formally aon less executed statute) (“board “any of trade” is cessor exchange. association, incorpo- whether exchange or added). (emphasis at 5863-64 persons Id. of unincorporated, rated or buying report engaged was not business shall be Committee’s The Senate for Treasury receiving the same or selling grain final word Congress’ en- Committee A This definition consignment”). Conference Amendment. sale on House and to reconcile every met subsequently virtually situation compassed legisla- proposed trad- Senate versions could be or ever which futures the Senate tion, dropped apparently Bullion See, e.g., v. Frankwell CFTC ed. on-ex- between (“Al- distinction Cir.1996) Committee’s (9th Ltd., 99 F.3d Instead, trading. off-exchange change and contracts in futures transactions most report ex- Committee’s the Conference occurring on a characterized could be Treasury Amendment plained associa- involving informal trade board foreign trading of that interbank “provides in the business engaged people tions subject Commis- currencies commodities.”) (internal selling buying and Rep. 93-1383 regulation.” Conf. sion omitted). citation marks and quotation U.S.C.C.A.N. (1974), reprinted in evidences definition The breadth added). With this regulate fu- general purpose Congress’ enacted understanding, commodities as covered tures been sub- that had language amendment course, But, fully possible. mitted Senate. currency was foreign five decades over B. Con- commodity. When not a covered cur- regulate agree gress the Commission determined Baragosh and *8 1974, specific the it so with transactions were did rency in that the Noble Wealth the Trea- and that certain transactions— foreign currency” understanding that “in therefore, Amendment, exempted sophis- and other sury banks trading “between under regulation not from participants” these transactions institutional ticated unless transactions the formally organized the fu- aon “conducted of trade.” 7 a board subject “conducted to not be exchange” tures —would U.S.C.A, 1999). (West 6(a)(1) S.Rep. See under the CEA. regulation 1974 reprinted No. the time of through inception its From Hence, the at 5863-64. U.S.S.C.A.N. CEA, here, the like its issue the at events See 7 U.S.C. Amendment. Treasury an ex- predecessors, included statutory 2(i). of “board definition ceedingly broad
327
Using
statutory
the
sury
broad
definition of
provide
Amendment was to
general
in construing
“board of trade”
the
exemption
Trea-
from CFTC regulation for so-
would,
sury Amendment
one
our phisticated off-exchange foreign currency
noted,
recently
sister circuits
Dunn,
trading.”
“render[ ]
473,
from the and its second clause would ever, parties use the same tools of all, sweep all, or almost such transactions statutory construction to reach very differ- in. back ent results.
Such an interpretation would be di
Baragosh,
relying heavily upon the
rectly at odds with a cardinal rule of statu Treasury letter and
Report,
Senate
con-
tory construction —“that a statute should tends that Congress intended
exempt
be interpreted so as not to
part
render one
futures trading “unless
such
inoperative.” Mountain States Tel. & Tel.
conducted on formally organized
Ana,
v. Pueblo
237, 249,
Santa
exchange.”
U.S.
S.Rep.
reprinted
105 S.Ct.
This use of in interpreting the Frankwell discuss, court Bullion better Treasury Amendment would also frustrate describes Congress’ intent. Although we very the purpose. Amendment’s respect “Con- circuit, the of our view sister we gress’ broad purpose in the enacting persuaded Trea- for the reasons that follow 1999) (West (prohibiting 6b(a)(i)-(iv) on this position the Commission’s 7(3) 7 U.S.C.A. bucketing); and fraud correct. question 1999) markets to (West contract (requiring gen report is Committee A Conference rules). adopt anti-fraud to guide acknowledged as the best erally loop- a broad had enacted Congress If itself, of statute short the intent legislative trading, through currency foreign hole for final statement the “represents it because mar- fraudulent shops and bucket houses both upon agreed terms it regulation, escape freely keting could Lukhard, F.2d v. Davis Congress.” currency mar- foreign the have left Moreover, Cir.1986). this (4th 973, 981 under- unprotected and substantially ket account Committee’s case, the Conference respect to purpose with its basic mined also accords Amendment Treasury of the obviously the Although market. passing purpose in Congress’ broader Con- persuade did Department Treasury Drug and Food See amendment. the 1974 individuals sophisticated protect gress Tobacco & Williamson v. Brown Admin. interfer- regulatory from institutions and 120, 133, 120 S.Ct. 529 U.S. Corp., Commission, expect we would by the ence that courts (noting 146 L.Ed.2d no exemption an to have enacted Congress ‘as a “interpret statute [each] strive this, Con- And necessary. than larger regulatory coherent symmetrical and us, is exact- report tells ference committee parts ‘fit, possible, if scheme,’ [to] and did. ly what ”) (citations whole’ harmonious into an course, exempted “interbank”
omitted). Of than banks. of more consists market thе CEA Congress amended When market, legislators discussed When to extend was purpose main 1974, its informal network of “an they spoke previously protections regulatory Act’s tellers,” other and or of “banks banks “pro- markets, as to so uncovered participants.” institutional sophisticated in which market[s] ... viable vide in 1974 reprinted S.Rep. No. S.Rep. confidence.” can have public added). (emphasis at 5963-64 U.S.C.C.A.N. at in 1974 U.S.C.C.A.N. reprinted to a Likewise, Treasury letter referred (“A person id. at 5859 also dealers,” or “so- of “banks network mar- unregulated [ ] in one of institutions.” phisticated informed protection same receive kets should added). What Id. regulated trading in the to those afforded partici- market interbank distinguished Comm, Agrie, markets.”); on Senate form, but their institutional pants was not Sess., Commodity Cong., 2d Forestry, 93d market, and wealth, in the experience their Aсt Trading Commission Futures trade in They could finance. knowledge of (statement (Comm.Pr.1974) of Chr. 6at themselves, among “informal networks” (“[I]t intent of Talmadge) to trade able public was general while regulato- fill all Committee] [Conference the as- only with currency futures regula- those the core of ry gaps”). Near provid- institutions formal sistance shops a ban bucket tory protections contracts, trading, margin ed standard manip- fraud hostility toward and firm Id. traders. finding other means of the part ulation, had been of which both previously as we have Accordingly, than for more predecessors and its trade 6(a) held, “it nature [wa]s See, e.g., 7 U.S.C.A. years. fifty (whether trade within a standardized 1999) (West futures trades (prohibiting negoti- individually or an organized market markets); 7 U.S.C.A. contract outside *10 329 deal) private ated that determine[d] istered as futures or profession- securities whеther trade [wa]s within the Act.” als. § CFMA 114 Stat. at #6D Forex, Tauber, Salomon Inc. v. 8 F.3d 6D6D#, la(12) at § codified 7 U.S.C.A. (4th Cir.1993). 977 in foreign Transactions (West Supp.2001). There is no question currency subject were not to Commission that trades by entered into Noble Wealth jurisdiction in period at issue this meet this test. Although a legislative en- they if “large-scale, customized, case were actment is not an guide authoritative negotiated, bilateral transactions between the meaning of previous legislation, we do sophisticated professionals.” financial Id. note that approach our here is consistent they subject jurisdiction But to its if with that by taken its recent effort small, standardized, they were offered as- jurisdiction” “clarify of the Commis- is, and mass marketed to individuals.2 sion the CFMA. standard, Under this the trades at Noble Wealth were certainly not exempted by sum, reject we Baragosh’s prin Amеndment, the Treasury but rather in- cipal challenge to the juris Commission’s within jurisdiction. cluded the CEA’s diction over Noble Wealth’s trades and hold that did empower the Com Finally, we note after this that liti mission to regulate those transactions.3 gation began, Congress enacted the Com Accordingly, the district court did not err modity Futures Modernization Act in imposing a civil penalty $1,211,058 (CFMA), “to clarify jurisdiction Baragosh, three salary times the and com Commodity Trading Futures missions that he received from certain Noble over retail foreign exchange trans Wealth, for his individual violations of actions and shops bucket that may not Act employed by while regulated.” otherwise 2(6), be Wealth. CFMA Nor did the (2000). court err in issuing injunctions Pub.L. No. 114 Stat. 2763 against CFMA, him. Under the U.S.C.A. 13a-1 Commission has (West 1999). jurisdiction over currency futures “offered to or entered into” any per with son who is not an “eligible partici contrаct III.
pant.” CFMA -, Stat. at Alternatively, 2(B)(ii) (West Baragosh contends U.S.C.A. codified the district Supp.2001). Among court erred in eligible holding those not as a be participants contract matter of persons law that he was a controlling than (or person less Wealth, million in $10 total assets lia- therefore $5 million, if the purpose of the ble for more than transaction is five dollars in million to manage risk rather than to speculate arising on restitution from the company’s vio- in price), movements are not reg- lations of the CEA. recognize
2. We language there is in Tau- application Amendment's shops, to bucket ’ might ber that be suggest read to that the like Noble was therefore reserved. Treasury exempts Amendment all off-ex- change trading. language This is dictum. As additionally challenges the Com- panel the Tauber only noted: "We hold jurisdiction ground mission’s on that No- individually-negotiated foreign currency op- ble Wealth transactions were spot contracts tion and sophis- between transactions governs the CEA futures contracts. ticated, large-scale foreign currency traders reject argument We ably for the reasons Treasury within the fall Amendment’s exclu- set forth the district court. See Noble Tauber, coverage.” sion from CEA 8 F.3d at Wealth, F.Supp.2d at 688. added). question Any about *11 330 primary the upon which activity tion or now, during as it did provides
The CEA
pow
if such
even
predicated,
that
litigation,
violation
to this
relevant
periods
v.
Monieson
indirectly”
exercised.”
“directly or
not
er was
who
an individual
Cir.1993)
(7th
852,
the CFTC,
has violated
F.2d
that
996
859
corporation
a
controls
&
Operating
violation
for such
v.
liable
Donohoe Consol.
“may be held
(quoting
(7th
1130,
the Commission
brought by
Cir.
1138
any action
F.2d
Corp.,
982
Prod.
[cor-
contrоlled
as such
Spiegel,
extent
No.
same
In re
1992)),
interpreting
to the
13c(b) (West
§
12,
(C.F.T.C.
7 U.S.C.A.
poration].”
Jan.
232212
1988 WL
1999)
la(16) (West
1999);
Johns,
7 U.S.C.A.
1988);4
In re
see also
la(28) (West
at 7 U.S.C.A.
(currently
21,
(C.F.T.C. Aug.
at *3
951733
WL
2001
attach,
the
liability
For
Supp.2001)).
had
2001) (same).
a defendant
Whether
(1)
corpo-
that a
prove:
must
Commission
on all the facts
depends
control
such
(2)
Act;
that the defen-
the
violated
ration
may
or director
an officer
circumstances:
that
indirectly” controlled
“directly or
dant
purposes
for
corporation
a
“control”
not
controlling
that
the
corporation;
Corp.,
section,
v. Avco Fin.
CFTC
see
this
faith or know-
good
act
not
“did
person
(S.D.N.Y.1998),
117
F.Supp.2d
28
act
indirectly, the
induced, directly or
ingly
Finan
v. Avco
by CFTC
opinion modified
7
constituting the violation.”
or acts
(1998), and
fact may finder conclude that Baragosh was indeed controlling person of Noble
Wealth.5 also vacate We and remand the
district holding court’s that Baragosh bucketed orders in violation of 7 U.S.C. (a)(iv)
§ 6b and its directing order Bara gosh to pay restitution to Noble Wealth David JOHNSON; Both Johnson,
customers. Robert rulings depend these W. IV, by through guardian the district court’s his conclusion that ad Bar litem, agosh Johnson; was a Michelle controlling person of Nicоle Wil- son, by through guardian Wealth and should be her light reconsidered in ad litem, Woodward; Vicki court’s ultimate holding on that Amanda Vickers, by question. through her guardian litem,
ad Vickers; Donna David Clarke, Plaintiffs-Appellees, IV. v.
For foregoing reasons, judgment court district AIKEN; CITY OF Umstead; Truxton Clark, C.W. Defendants- AFFIRMED IN AND PART VACAT- Appellants, ED AND REMANDED IN PART.
WILLIAMS, Circuit Judge, concurring in part and concurring in the judgment: Busbee, individually J.C. as Public Safe-
I I, concur in Parts III ty of Judge IV City Aiken; Officers with the opinion, Motz’s Rodney concur Mills; Craig Burgess; result H.V. respect to Part II. I separately write Morrison; Durell; Mike Besley; Bob If is found controlling to be a controlling person liability only to attaches person, the fact finder must also primary determine acts during committed actor when he attained that period status. Under control- of control. See Brown v. Enstar ling person provisions Inc., federal (11th Cir.1996); Group, securities 84 F.3d law, persuasive which are authority for inter- Louis Seligman, Loss and Joel Reg- Securities 13c(b), preting (3d U.S.C. ed.1992). see Rosenthal & Co. ulation 4472 We see no reason CFTC, (7th Cir.1986), v. 802 F.2d vary principle applying the CEA.