7 U.S.C. § 6b | Contracts designed to defraud or mislead

(a)

Unlawful actions

It shall be unlawful—

(1)

for any person, in or in connection with any order to make, or the making of, any contract of sale of any commodity in interstate commerce or for future delivery that is made, or to be made, on or subject to the rules of a designated contract market, for or on behalf of any other person; or

(2)

for any person, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery, or swap, that is made, or to be made, for or on behalf of, or with, any other person, other than on or subject to the rules of a designated contract market—

(A)

to cheat or defraud or attempt to cheat or defraud the other person;

(B)

willfully to make or cause to be made to the other person any false report or statement or willfully to enter or cause to be entered for the other person any false record;

(C)

willfully to deceive or attempt to deceive the other person by any means whatsoever in regard to any order or contract or the disposition or execution of any order or contract, or in regard to any act of agency performed, with respect to any order or contract for or, in the case of paragraph (2), with the other person; or

(D)

(i)

to bucket an order if the order is either represented by the person as an order to be executed, or is required to be executed, on or subject to the rules of a designated contract market; or

(ii)

to fill an order by offset against the order or orders of any other person, or willfully and knowingly and without the prior consent of the other person to become the buyer in respect to any selling order of the other person, or become the seller in respect to any buying order of the other person, if the order is either represented by the person as an order to be executed, or is required to be executed, on or subject to the rules of a designated contract market unless the order is executed in accordance with the rules of the designated contract market.

(b)

Clarification

Subsection (a)(2) of this section shall not obligate any person, in or in connection with a transaction in a contract of sale of a commodity for future delivery, or swap, with another person, to disclose to the other person nonpublic information that may be material to the market price, rate, or level of the commodity or transaction, except as necessary to make any statement made to the other person in or in connection with the transaction not misleading in any material respect.

(c)

Buying and selling orders for commodity

ProvidedAnd provided furtherNothing in this section or in any other section of this chapter shall be construed to prevent a futures commission merchant or floor broker who shall have in hand, simultaneously, buying and selling orders at the market for different principals for a like quantity of a commodity for future delivery in the same month executing such buying and selling orders at the market price: , That any such execution shall take place on the floor of the exchange where such orders are to be executed at public outcry across the ring and shall be duly reported, recorded, and cleared in the same manner as other orders executed on such exchange: , That such transactions shall be made in accordance with such rules and regulations as the Commission may promulgate regarding the manner of the execution of such transactions.

(d)

Inapplicability to transactions on foreign exchanges

Nothing in this section shall apply to any activity that occurs on a board of trade, exchange, or market, or clearinghouse for such board of trade, exchange, or market, located outside the United States, or territories or possessions of the United States, involving any contract of sale of a commodity for future delivery that is made, or to be made, on or subject to the rules of such board of trade, exchange, or market.

(e)

Contracts of sale on group or index of securities

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails, or of any facility of any registered entity, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery (or option on such a contract), or any swap, on a group or index of securities (or any interest therein or based on the value thereof)—

(1)

to employ any device, scheme, or artifice to defraud;

(2)

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

(3)

to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

Sept. 21, 1922, ch. 369, § 4b June 15, 1936, ch. 545, § 5 49 Stat. 1493 Pub. L. 90–258, § 5Feb. 19, 196882 Stat. 27 Pub. L. 93–463, title IV, § 405Oct. 23, 197488 Stat. 1413 Pub. L. 99–641, title I, § 101Nov. 10, 1986100 Stat. 3557 Pub. L. 102–546, title IV, § 402(3)Oct. 28, 1992106 Stat. 3624 Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(5)]Dec. 21, 2000114 Stat. 2763 Pub. L. 110–234, title XIII, § 13102May 22, 2008122 Stat. 1432 Pub. L. 110–246, § 4(a)June 18, 2008122 Stat. 1664 Pub. L. 111–203, title VII, § 741(b)(1)July 21, 2010124 Stat. 1730 (, as added , ; amended , , ; , , ; , , ; , , ; , , , 2763A–407; , , ; , title XIII, § 13102, , , 2194; , , .)

Editorial Notes

Codification

Pub. L. 110–234 Pub. L. 110–246 Pub. L. 110–234 section 4(a) of Pub. L. 110–246 and made identical amendments to this section. The amendments by were repealed by .

Amendments

Pub. L. 111–203, § 741(b)(1)(A)section 7a(g) of this title2010—Subsec. (a)(2). , substituted “or swap,” for “or other agreement, contract, or transaction subject to paragraphs (1) and (2) of ,”.

Pub. L. 111–203, § 741(b)(1)(B)section 7a(g) of this titleSubsec. (b). , substituted “or swap,” for “or other agreement, contract or transaction subject to paragraphs (1) and (2) of ,”.

Pub. L. 111–203, § 741(b)(1)(C)Subsec. (e). , added subsec. (e).

Pub. L. 110–246, § 131022008—, inserted section catchline, added subsecs. (a) and (b), redesignated former subsecs. (b) and (c) as (c) and (d), respectively, and struck out former subsec. (a) which related to contracts designed to defraud or mislead and bucketing orders.

Pub. L. 106–5542000—Subsec. (a)(1). substituted “registered entity” for “contract market” in two places.

Pub. L. 102–5461992— designated first par. as subsec. (a), redesignated cls. (a) to (c) as subpars. (A) to (C), respectively, and subpars. (A) to (D) as cls. (i) to (iv), respectively, and designated second and third undesignated pars. as subsecs. (b) and (c), respectively.

Pub. L. 99–6411986— struck out “on or subject to the rules of any contract market,” after “to be made” in cl. (2) of first par. and added concluding paragraph that this section not apply to activity on board of trade, exchange, market, or clearinghouse located outside United States involving contract of sale of commodity for future delivery.

Pub. L. 93–4631974— substituted “a commodity” for “cotton” in provisions following subpar. (D) and inserted requirement that execution of buying and selling orders for commodities held simultaneously by the same merchant or broker be carried out in accordance with such rules and regulations as the Commission may promulgate regarding the manner of the execution of such transactions.

Pub. L. 90–2581968— relocated cl. (1) designation in first par. to follow “unlawful” rather than to precede “any contract of sale”, provided in such cl. (1) for orders to make or making of contracts of sale “made, or to be made on or subject to the rules of any contract market, for or on behalf of any other person” and in cl. (2) “for any person, in or in connection with any order to make, or the making of,” any contract of sale of any commodity for future delivery for or on behalf of any “other” person; and inserted “other” before “person” in subpar. (A) and in subpars. (B) and (C) where appearing for first time, respectively.

Statutory Notes and Related Subsidiaries

Effective Date of 2010 Amendment

Pub. L. 111–203July 21, 2010Pub. L. 111–203 section 754 of Pub. L. 111–203 section 1a of this titleAmendment by effective on the later of 360 days after , or, to the extent a provision of subtitle A (§§ 711–754) of title VII of requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle A, see , set out as a note under .

Effective Date of 2008 Amendment

Pub. L. 110–234 Pub. L. 110–246May 22, 2008Pub. L. 110–234 section 4 of Pub. L. 110–246 section 8701 of this titleAmendment of this section and repeal of by effective , the date of enactment of , see , set out as an Effective Date note under .

Effective Date of 1974 Amendment

Pub. L. 93–463 section 418 of Pub. L. 93–463 section 2 of this titleFor effective date of amendment by , see , set out as a note under .

Effective Date of 1968 Amendment

Pub. L. 90–258Feb. 19, 1968section 28 of Pub. L. 90–258 section 2 of this titleAmendment by effective 120 days after , see , set out as a note under .

Effective Date

June 15, 1936section 1 of this titleFor effective date of section, see section 13 of act , set out as an Effective Date of 1936 Amendment note under .