CFTC v. Zelener
United States Court of Appeals for the Seventh Circuit
373 F.3d 861 (2004)
- Written by Brett Stavin, JD
Facts
Michael Zelener (defendant) owned and managed two corporations doing business as British Capital Group or BCG, both of which would solicit customers’ orders for foreign currency. Each customer opened an account with BCG and another account with AlaronFX, a dealer in foreign currency. AlaronFX was the source of all currency and acted as principal for all contracts in which currency was bought and sold through BCG. In each contract, the customer would specify the currency, whether the customer was going long or short, and the desired quantity, with a minimum of $5,000. Each contract stipulated that settlement would occur within 48 hours. In practice, however, few BCG customers paid within that time frame. Typically, the contracts would roll over for successive two-day periods, effectively leaving the customer with an open position in a foreign currency. The CFTC believed that customers might have been deceived and, thus, pursued an enforcement action. Zelener challenged the CFTC’s regulatory jurisdiction on the theory that the contracts at issue were not contracts for the sale of a commodity for future delivery under the Commodity Exchange Act.
Rule of Law
Issue
Holding and Reasoning (Easterbrook, J.)
What to do next…
Here's why 830,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,400 briefs, keyed to 994 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.
