U.S. Code » Title 7 » Chapter CHAPTER 1— COMMODITY EXCHANGES

7 U.S.C. § 12c

Disciplinary actions

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(a) Action taken; written notice of reasons for action(1) Any exchange or the Commission if the exchange fails to act, may suspend, expel, or otherwise discipline any person who is a member of that exchange, or deny any person access to the exchange. Any such action shall be taken solely in accordance with the rules of that exchange.(2) Any suspension, expulsion, disciplinary, or access denial procedure established by an exchange rule shall provide for written notice to the Commission and to the person who is suspended, expelled, or disciplined, or denied access, within thirty days, which includes the reasons for the exchange action in the form and manner the Commission prescribes. An exchange shall make public its findings and the reasons for the exchange action in any such proceeding, including the action taken or the penalty imposed, but shall not disclose the evidence therefor, except to the person who is suspended, expelled, or disciplined, or denied access, and to the Commission.(b) Review by Commission

The Commission may, in its discretion and in accordance with such standards and procedures as it deems appropriate, review any decision by an exchange whereby a person is suspended, expelled, otherwise disciplined, or denied access to the exchange. In addition, the Commission may, in its discretion and upon application of any person who is adversely affected by any other exchange action, review such action.

(c) Affirmance, modification, set aside, or remand of action

The Commission may affirm, modify, set aside, or remand any exchange decision it reviews pursuant to subsection (b), after a determination on the record whether the action of the exchange was in accordance with the policies of this chapter. Subject to judicial review, any order of the Commission entered pursuant to subsection (b) shall govern the exchange in its further treatment of the matter.

(d) Stay of action

The Commission, in its discretion, may order a stay of any action taken pursuant to subsection (a) pending review thereof.

(e) Major disciplinary rule violations(1) The Commission shall issue regulations requiring each registered entity to establish and make available to the public a schedule of major violations of any rule within the disciplinary jurisdiction of such registered entity.(2) The regulations issued by the Commission pursuant to this subsection shall prohibit, for a period of time to be determined by the Commission, any individual who is found to have committed any major violation from service on the governing board of any registered entity or registered futures association, or on any disciplinary committee thereof.(Sept. 21, 1922, ch. 369, § 8c, as added Pub. L. 93–463, title II, § 216, Oct. 23, 1974, 88 Stat. 1405; amended Pub. L. 95–405, § 18, Sept. 30, 1978, 92 Stat. 874; Pub. L. 102–546, title II, § 206(a)(2), Oct. 28, 1992, 106 Stat. 3602; Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(20)], Dec. 21, 2000, 114 Stat. 2763, 2763A–410.)Editorial NotesAmendments

2000—Subsec. (e). Pub. L. 106–554 substituted “registered entity” for “contract market” wherever appearing.

1992—Pub. L. 102–546 redesignated pars. (1) to (4) as subsecs. (a) to (d), respectively, in subsec. (a) redesignated subpars. (A) and (B) as pars. (1) and (2), respectively, in subsec. (c) substituted references to subsection (b) for references to paragraph (2), in subsec. (d) substituted reference to subsection (a) for reference to paragraph (1), and added subsec. (e).

1978—Par. (1)(B). Pub. L. 95–405 substituted “An exchange shall make public its findings and the reasons for the exchange action in any such proceeding, including the action taken or the penalty imposed, but shall not disclose the evidence therefor, except to the person who is suspended, expelled, or disciplined or denied access, and to the Commission” for “Otherwise the notice and reasons shall be kept confidential”.

Statutory Notes and Related SubsidiariesEffective Date of 1978 Amendment

Amendment by Pub. L. 95–405 effective Oct. 1, 1978, see section 28 of Pub. L. 95–405, set out as a note under section 2 of this title.

Effective Date

For effective date of section, see section 418 of Pub. L. 93–463, set out as an Effective Date of 1968 Amendment note under section 2 of this title.

Notes of Decisions
Cited in 16 cases, 1979–1999 · leading case: Karen E. Cardoza v. Commodity Futures Trading Comm'n & Bd. of Trade of the City of Chicago, Inc., an Illinois Corp., 768 F.2d 1542 (7th Cir. 1985).
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Karen E. Cardoza v. Commodity Futures Trading Comm'n & Bd. of Trade of the City of Chicago, Inc., an Illinois Corp., 768 F.2d 1542 (7th Cir. 1985). · cites it 7× “As stated in 7 U.S.C. § 12c: (2) The Commission may, in its discretion and in accordance with such standards and procedures as it deems appropriate, review any decision by an exchange whereby a person is suspended, expelled, otherwise disciplined, or denied access to the…”
P. J. Taggares Co. v. New York Mercantile Exch., 476 F. Supp. 72 (S.D.N.Y. 1979). · cites it 2× “7 U.S.C. § 12c(l) provides: (1)(A) Any exchange or the Commission if the exchange fails to act, may suspend, expel, or otherwise discipline any person who is a member of that exchange, or deny any person access to the exchange.”
Apex Oil Co. v. Dimauro, 110 F.R.D. 490 (S.D.N.Y. 1985). · cites it 2× “The Absolute Privilege Claim The statutory provision in question is section 8c(l) of the Commodity Exchange Act, 7 U.S.C. § 12c(l), which provides as follows: (1)(A) Any exchange or the Commission if the exchange fails to act, may suspend, expel, or otherwise discipline any…”
Michael J. Clark, Petitioner, v. Commodity Futures Trading Comm'n, Respondent, 170 F.3d 110 (2d Cir. 1999). · cites it 2× “That court did note its agreement with the proposition that the construction of the statute “results in different courts reviewing functionally equivalent proceedings — direct review in the courts of appeals under 7 U.”
Gregory Jaunich v. United States Commodity Futures Trading Comm'n, 50 F.3d 518 (8th Cir. 1995). · cites it 3× “Two of the examples the explanation cited of proceedings that did not require court of appeals review under the CEA were CFTC “action in reviewing exchange disciplinary actions” under 7 U.S.C. § 12c, and CFTC “action in reviewing registered futures associations disciplinary…”
In Re Drexel Burnham Lambert Grp. Inc., 120 B.R. 724 (Bankr. S.D.N.Y. 1990). · cites it 2× “The CBOT argues that appeal could be taken from its decision to the CFTC or a court of competent jurisdiction, citing 7 U.S.C. § 12c and 5 U.S.C. § 701 et seq.”
Commodity Futures Trading Comm'n v. Polonyi, 531 F. Supp. 18 (W.D. Mo. 1981). · cites it 5× “7 U.S.C. § 12c(1)(A). By its language, the section does not require the Commission to undertake any action; rather, the section states that the Commission, where “the exchange fails to act, may suspend, expel or otherwise discipline .”
Abe I. Korach v. Chicago Mercantile Exch., 747 F.2d 414 (7th Cir. 1984). · cites it 3× “In this connection, it should be noted that section 8c(1)(A) of the Commodity Exchange Act, 7 U.S.C. § 12c(1)(A), provides that "[a]ny exchange .”
Strusiner v. Perlin, 478 F. Supp. 464 (N.D. Ill. 1979). · cites it 3× “Pursuant to 7 U.S.C. § 12c(2) & (3), the CFTC is authorized to review any trading exchange decision which resulted in a member being “suspended, expelled, [or] otherwise disciplined.”
Rivers v. Rosenthal & Co., 634 F.2d 774 (5th Cir. 1980). “§ 13a-l, as well as to conduct disciplinary proceedings against exchange members, 7 U.S.C. § 12c, and revoke or suspend the registration or trading privileges of any such individual, 7 U.”
Navigator Grp. Funds v. Shearson Hayden Stone Inc., 487 F. Supp. 416 (S.D.N.Y. 1980). “§ 18 ; disciplinary proceedings to be conducted by the CFTC with respect to members of commodities exchanges found violating the Act, 7 U.S.C. § 12c; authority in the CFTC to sue in federal court for injunctions against unlawful commodities futures practices, 7 U.”
Cardoza v. Commodity Futures Trading Comm'n, 588 F. Supp. 621 (N.D. Ill. 1984). · cites it 4× “Polonyi, 531 F.Supp. 18, 19 (W.D.Mo.1981). Pursuant to this section, the CFTC has promulgated rules for the review of exchange actions: [t]he determination to review any exchange disciplinary or other adverse action is a matter committed to the Commission’s discretion.”
Show all 16 citing cases →
— 7 U.S.C. § 12c(1)(A) — 3 cases
Karen E. Cardoza v. Commodity Futures Trading Comm'n & Bd. of Trade of the City of Chicago, Inc., an Illinois Corp., 768 F.2d 1542 (7th Cir. 1985). “As stated in 7 U.S.C. § 12c: (2) The Commission may, in its discretion and in accordance with such standards and procedures as it deems appropriate, review any decision by an exchange whereby a person is suspended, expelled, otherwise disciplined, or denied access to the…”
Commodity Futures Trading Comm'n v. Polonyi, 531 F. Supp. 18 (W.D. Mo. 1981). “7 U.S.C. § 12c(1)(A). By its language, the section does not require the Commission to undertake any action; rather, the section states that the Commission, where “the exchange fails to act, may suspend, expel or otherwise discipline .”
Abe I. Korach v. Chicago Mercantile Exch., 747 F.2d 414 (7th Cir. 1984). “In this connection, it should be noted that section 8c(1)(A) of the Commodity Exchange Act, 7 U.S.C. § 12c(1)(A), provides that "[a]ny exchange .”
— 7 U.S.C. § 12c(2) — 6 cases
Karen E. Cardoza v. Commodity Futures Trading Comm'n & Bd. of Trade of the City of Chicago, Inc., an Illinois Corp., 768 F.2d 1542 (7th Cir. 1985). “As stated in 7 U.S.C. § 12c: (2) The Commission may, in its discretion and in accordance with such standards and procedures as it deems appropriate, review any decision by an exchange whereby a person is suspended, expelled, otherwise disciplined, or denied access to the…”
Commodity Futures Trading Comm'n v. Polonyi, 531 F. Supp. 18 (W.D. Mo. 1981). “7 U.S.C. § 12c(1)(A). By its language, the section does not require the Commission to undertake any action; rather, the section states that the Commission, where “the exchange fails to act, may suspend, expel or otherwise discipline .”
Abe I. Korach v. Chicago Mercantile Exch., 747 F.2d 414 (7th Cir. 1984). “In this connection, it should be noted that section 8c(1)(A) of the Commodity Exchange Act, 7 U.S.C. § 12c(1)(A), provides that "[a]ny exchange .”
Strusiner v. Perlin, 478 F. Supp. 464 (N.D. Ill. 1979). “Pursuant to 7 U.S.C. § 12c(2) & (3), the CFTC is authorized to review any trading exchange decision which resulted in a member being “suspended, expelled, [or] otherwise disciplined.”
Cardoza v. Commodity Futures Trading Comm'n, 588 F. Supp. 621 (N.D. Ill. 1984). “Polonyi, 531 F.Supp. 18, 19 (W.D.Mo.1981). Pursuant to this section, the CFTC has promulgated rules for the review of exchange actions: [t]he determination to review any exchange disciplinary or other adverse action is a matter committed to the Commission’s discretion.”
— 7 U.S.C. § 12c(3) — 3 cases
Karen E. Cardoza v. Commodity Futures Trading Comm'n & Bd. of Trade of the City of Chicago, Inc., an Illinois Corp., 768 F.2d 1542 (7th Cir. 1985). “As stated in 7 U.S.C. § 12c: (2) The Commission may, in its discretion and in accordance with such standards and procedures as it deems appropriate, review any decision by an exchange whereby a person is suspended, expelled, otherwise disciplined, or denied access to the…”
Strusiner v. Perlin, 478 F. Supp. 464 (N.D. Ill. 1979). “Pursuant to 7 U.S.C. § 12c(2) & (3), the CFTC is authorized to review any trading exchange decision which resulted in a member being “suspended, expelled, [or] otherwise disciplined.”
Abe I. Korach v. Chicago Mercantile Exch., 747 F.2d 414 (7th Cir. 1984). “In this connection, it should be noted that section 8c(1)(A) of the Commodity Exchange Act, 7 U.S.C. § 12c(1)(A), provides that "[a]ny exchange .”
— 7 U.S.C. § 12c(b) — 1 case
Gregory Jaunich v. United States Commodity Futures Trading Comm'n, 50 F.3d 518 (8th Cir. 1995). “Two of the examples the explanation cited of proceedings that did not require court of appeals review under the CEA were CFTC “action in reviewing exchange disciplinary actions” under 7 U.S.C. § 12c, and CFTC “action in reviewing registered futures associations disciplinary…”
— 7 U.S.C. § 12c(c) — 3 cases
Michael J. Clark, Petitioner, v. Commodity Futures Trading Comm'n, Respondent, 170 F.3d 110 (2d Cir. 1999). “That court did note its agreement with the proposition that the construction of the statute “results in different courts reviewing functionally equivalent proceedings — direct review in the courts of appeals under 7 U.”
Gregory Jaunich v. United States Commodity Futures Trading Comm'n, 50 F.3d 518 (8th Cir. 1995). “Two of the examples the explanation cited of proceedings that did not require court of appeals review under the CEA were CFTC “action in reviewing exchange disciplinary actions” under 7 U.S.C. § 12c, and CFTC “action in reviewing registered futures associations disciplinary…”
Arnold v. Commodity Futures Trading Comm'n, 987 F. Supp. 1463 (S.D. Fla. 1997).
— 7 U.S.C. § 12c(l) — 3 cases
Karen E. Cardoza v. Commodity Futures Trading Comm'n & Bd. of Trade of the City of Chicago, Inc., an Illinois Corp., 768 F.2d 1542 (7th Cir. 1985). “As stated in 7 U.S.C. § 12c: (2) The Commission may, in its discretion and in accordance with such standards and procedures as it deems appropriate, review any decision by an exchange whereby a person is suspended, expelled, otherwise disciplined, or denied access to the…”
P. J. Taggares Co. v. New York Mercantile Exch., 476 F. Supp. 72 (S.D.N.Y. 1979). “7 U.S.C. § 12c(l) provides: (1)(A) Any exchange or the Commission if the exchange fails to act, may suspend, expel, or otherwise discipline any person who is a member of that exchange, or deny any person access to the exchange.”
Apex Oil Co. v. Dimauro, 110 F.R.D. 490 (S.D.N.Y. 1985). “The Absolute Privilege Claim The statutory provision in question is section 8c(l) of the Commodity Exchange Act, 7 U.S.C. § 12c(l), which provides as follows: (1)(A) Any exchange or the Commission if the exchange fails to act, may suspend, expel, or otherwise discipline any…”
— 7 U.S.C. § 12c(l)(A) — 2 cases
P. J. Taggares Co. v. New York Mercantile Exch., 476 F. Supp. 72 (S.D.N.Y. 1979). “7 U.S.C. § 12c(l) provides: (1)(A) Any exchange or the Commission if the exchange fails to act, may suspend, expel, or otherwise discipline any person who is a member of that exchange, or deny any person access to the exchange.”
Bd. of Trade v. Commodity Futures Trading Comm'n, 818 F. Supp. 228 (N.D. Ill. 1993).
— 7 U.S.C. § 12c(l)(B) — 1 case
Apex Oil Co. v. Dimauro, 110 F.R.D. 490 (S.D.N.Y. 1985). “The Absolute Privilege Claim The statutory provision in question is section 8c(l) of the Commodity Exchange Act, 7 U.S.C. § 12c(l), which provides as follows: (1)(A) Any exchange or the Commission if the exchange fails to act, may suspend, expel, or otherwise discipline any…”
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