17 C.F.R. § 31.3

Fraud in connection with certain transactions in silver or gold bullion or bulk coins, or other commodities

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It shall be unlawful for any person, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly:

(a) To employ any device, scheme, or artifice to defraud,

(b) 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

(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in, or in connection with (1) an offer to make or the making of, any transaction for the purchase, sale or delivery of silver bullion, gold bullion, bulk silver coins, bulk gold coins, or any other commodity pursuant to a standardized contract commonly known to the trade as a margin account, margin contract, leverage account, or leverage contract, or pursuant to any contract, account, arrangement, scheme, or device that serves the same function or functions as such a standardized contract, or is marketed or managed in substantially the same manner as such a standardized contract, or (2) the maintenance or carrying of any such contract.

The provisions of this section shall not apply to any transaction expressly prohibited by section 19(a) of the Act. (Secs. 2(a), 8a, and 19 of the Commodity Exchange Act and secs. 2 and 23 of Pub. L. 95-405 (92 Stat. 865, 870-871); 7 U.S.C. 2 and 12a) [43 FR 58554, Dec. 15, 1978. Redesignated at 49 FR 5526, Feb. 13, 1984]

Notes of Decisions

Cited in 4 cases, 1986–2011 · leading case: Theodore Purdy v. Commodity Futures Trading Comm'n, 968 F.2d 510 (5th Cir. 1992).

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Theodore Purdy v. Commodity Futures Trading Comm'n, 968 F.2d 510 (5th Cir. 1992). · cites it 2× “17 C.F.R. § 31.3 (1986). We hold the above evidence as substantial enough to support the AU’s findings that bucketing violations did not exist, and therefore could not be a cause in fact of Purdy’s losses.”

First Nat'l Monetary Corp. & Michael Bivins v. A.J. Weinberger & Commodity Futures Trading Comm'n, 819 F.2d 1334 (1st Cir. 1987). “This regulation is now codified at 17 C.F.R. § 31.3 (1986). 2 . Section 14(a) provided in pertinent part: Any person complaining of any violation of any provision of this chapter or any rule, regulation, or order thereunder by any person who is registered or required to be…”

Premex, Inc., & Samuel N. Zack v. Commodity Futures Trading Comm'n, 785 F.2d 1403 (9th Cir. 1986). “08 at 23 (1982), leverage contracts were not regulated separately from futures contracts (except for a general antifraud provision now codified at 17 C.F.R. § 31.3 ) until 1984. In that year, the Commission promulgated comprehensive regulations for leverage contract merchants.”

Commodity Futures Trading Comm'n v. Am. Precious Metals, LLC, 845 F. Supp. 2d 1279 (S.D. Fla. 2011). · cites it 2× “3 thereunder, 17 C.F.R. § 31.3 , by making fraudulent misrepresentations to customers while marketing precious metals.”

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