morning your honour's please of the court the commission action is going arguments fly in the face of dodd frank section some of what you know it would help me if you could just explain very simply calls on the phone and says i would like to buy a precious metals of the atlas program and like my leverage to put on twenty percent and he sends in his money he will sign an agreement already monica takes the trade and the delivery is made to the depository within twenty eight days usually less than that and actual delivery is made and then a notice of transfer of title is sent to the client the trade is done and there is a security interest consistent with model code that exists in that the customer also signs that's how it works so they the customers bought gold in this gold as in well it sits there that the customer may want to speculate but now what can the customer now do the customer can have it delivered can pay off the amount of the loan have the metal deliver the customer can buy another metal the customer can do several things but but typically the customer doesn't get the cold delivered to him he can i know but that's not typical of what i'm asking about the typical transaction we're talking about the leverage at this program which is when you purchase on leverage or margin and the customer can buy more metal but the customer wishes that's the way it works for the customer if i were the second  hundred y situation what you're saying is because of the rights that exist between the customer and monica that is that the customer has to pay off the money before he can the loan before he gets the metals and that means there's constructive possession that your argument isn't it and he said that is correct i was on page twenty seven so they have admitted that there's not one instance not one shred of evidence that there's any problem in making deliberate that's not what this case is about what this case is about is they've made it really clear is that they are now trying to do  back and run after congress specifically told them no to your suggestion that we eliminate the collateralized delivery to a depository that is what they're fighting about congress said no you can't have footnote well of the invitation to everyone to make comments on the new rules for actual livery the c f t c cited to congress in marshall's comments about what they were trying to do and this all flowed from the absolutely clear in order to figure out what actual delivery is what delivery is you look at the word actual and you look at the legislative history they already cited to marshall's comments about what we're trying to do marshal made it absolutely clear on page eighty one page eighty eight of the supplemental appendix which is a copy of the record he made it absolutely clear look according what you're saying monica is doing it the right way so let want t what the actual delivery means and there is no doubt what actual delivery means because they've adopted the model code that's what the u s government says in its brief that the customers have no rights to control the disposition of the metal in the depository mo next retains the right to dispose of the metal at any time notwithstanding its finance sales to retail customers is that accurate is accurate that there's a demand there that's why i just don't see why it matters that they had a different opinion if your position is the statute is unambiguous then you ignore their opinion from twenty thirteen and their opinion  also that the purpose informs the meaning and according to congressman marshall who they quote and they and they direct everyone to congressman marshall said that it's very clear we're trying to do we're trying to stop scammers who don't have the law because there are no factual disputes here none with respect to whether the medals delivered you could decide under oath and it's as we often at least it should be bifurcated and that is we respectfully suggest plan b here that should be no more than that because what they're doing is in their favor is there specifically violating zellner they try to make a fraud case and they've also tried to argue that this is for the protection of everyone zellner said absolutely not just because the there and they stipulate that the metals are there then it's clear under congressional history that actual delivery has occurred period so i want to ask you about this and problems with compliance with  investigations and publicize information they collect but more importantly what i'm concerned about is that this is an organization which has reversed itself they can do it but it's reversed itself with no basis and they are saying in papers that the metal isn't there they're saying this is a fraud on of people they're saying it's getting worse they were specifically misquoted they advertising materials to tell this court that monica said untrue things to people this is an agency and this is what will your response to the subpoena will show that incorrect we already have your ads that's why it's so puzzling that you're resisting compliance and saying we're entitled to keep secrets in iran or we're entitled to do what anyone else would in a competitive market  has been quite clear that how customers track records are not public information they are irrelevant and what they want is monica's track record by the way in a series of down twenty years they wanted monica's track record and it has no bearing on actual delivery how monica's customers did period it has no end nor have they ever suggested in any coherent way and how has any bearing they have given no explanation which also runs right into the teeth of zellner if the agency has no explanation for it it's hard human then it should be given any credit and should be given no deference and here the judge easterbrook where they have specifically flipped and now they're saying the exact opposite of what they said in their pronouncements they entitled to no deference this is that this defines capricious and arbitrary conduct and we would respectfully submit you would know if i the da frank exemption so that i will not allow and that's exactly what they're doing so let me ask you this you can't file a protective order you said the c f t c gets published basically everything about the investigation before sit down but that's not the point the point is this judge marshall said we're not going this is going to be a minimal burden on monica we're not after you in fact iranian should have something actual delivery that phrase in the statute doesn't come from the model code actual delivery which in monic says ma nix's account agreements and mock and and congress to marshall had met with monica in the head of the n f l a the day before and they use and it's clear when when marshall said comps marshall said we want minimal burdens on you then you do it the right way your honor respectfully submit this is not minimal birds and judge easterbrook that's another point this was that monica was the model fall the model code so they completely flipped themselves and to really nail down this point if you look at the profit at the worst case and i'd like to direct you to docket sixty seven which is exhibit seven and have you know we don't want them using it you know this is not moot they have it we want some of the documents we want some of the material back so it's not a question of the bird no it's certain it's responded to it and therefore it now we're title to get those materials back you know if this court agrees with us that they're not entitled to it but they've looked at them already somewhat they looked at them hard that doesn't matter to us they looked at them you know use in certain track record information of customers which is absolutely irrelevant to what they claimed their investigation was why do you care because it's irrelevant damaging material and that have to do is ask for protective order and it not be disclosed to anybody your honor but we can do that but they intend to use it they've and that is the heart of what they're doing now and to tell you know if you don't know protected with a protective order prevents them from sharing it for from some competitor you can you go back to that but what they'll do is they will file a pleading which will have the information in it and the reason why we're concerned about it is that it's well known in this country that most commodity be done it that if they ended up getting to that point that that's also possible and then i mean i certainly could do that how it would work in practice i'm not positive i know how great the radisson filed a motion the judge would rule and then the  under seal maybe it would be instructions in the clerk's office not to give up anything i mean and maybe it would it maybe it is as your honor knows the district courts have been resisting filing that you're a piling material under seal you know there at the really inv it so we don't know what would happen and to answer your question the reason why it's important is because the c f you see and congress has made it real clear that as long as you don't represent how your customers do it you don't have to disclose f c be protected against your your competitors taking advantage of this but to keep it from they want to snatch it back from the government after you've given it to one book that's if other other people can take pot shots at our customers do all right and they don't have to say anything about how their customers do f c m's do not disclose track records when united by taking pot shots they can say look at monica's customers how they do although it's not discretionary accounts they could take it's a competitive industry out there your honor and people you know it's brutish short and mean and people take advantage of anything they can to make your competitor look worse and now we have this law on this you know the fitzgerald case which they cited make it clear that you're not entitled to this information unless you are telling the public how your customers do otherwise it is just not relevant so the question is guy right because they fall the model code they were not supposed to deal with these sorts of litigation period and this and this and the c f t c was told by a federal district court judge exactly good morning and may place the court this is a case in which just the f t c obtained a district court order compelling the appellant's to comply with an investigative subpoena this court should a perm and i have two principal point number one the law of this area is well established even when a subpoena and party objects that it is not covered by the statute in question the agency is entitle to an order of full compliance with its subpoena so long as the parties conduct superficially appears to bring it within the coverage of the statute or boarded another way so long as the party is arguably covered this case is one in which the district court adopted a magistrate's report and recommendation to judges in the district court reportedly sell precious metals to retail customers using leverage on margin they loan people the money to buy the metals and it's a means of secular leading on the price of the metal under section two c to d the dodd frank act those kinds of transactions are to be conducted on regulated exchanges that provide for far more  protections for retail customers guaranteeing essential counterparty that takes the opposite side of the transaction and protections in the event of fraud or bankruptcy on the part of the s disagree because it's the record of how man x is purportedly selling these metals and it is the record of how it is managing the positions of the customers how it is making margin calls and it has all manner of details about the transactions that is the that sets a tremendous amount of the evidence in transactions are being conducted it's contained in this computer database so in order to determine the statutory coverage question which in this case boils down to monica's argument that it needs an exception statute one one of the things that we talk about in the c r t c is interpretation interpretive guidance published in the federal register is how are the transactions marketed managed and performed are and that bifurcation between evidence that's relevant to the statutory coverage question versus evidence that's relevant to maybe underlying violations for instance if monica is engaging in fraud the date the database contains information that is relevant to the statutory exception and what the district court found correctly in this case is that the database was indeed relevant to the statutory coverage question not making actual delivery of the metals that it purports to sell the means by which they claim to deliver a medal is to transfer the depositories disclaim any responsibility for the accuracy of information in those title documents and the title documents once received by monex as customers don't entitle those customers to direct i i understand that but it's completely different from we don't deliver it appears to be is that manics is conducting this means to speculate on the price of metal and they are not making actual delivery of metal and therefore this you have to say to women today we need and need to merely establish that the district court didn't abuse its discretion by finding that that manics arguably covered by c n a section to see today from m even the it be said to be arguably covered by the statute or superficially covered by the statute and we submit that that's just not possible for monikers to establish here where customers who purportedly receive title to was if you want to get your get your gold back from the depository you have to you have to pay that's right arguably not delivered not actually delivered until the customer pays in full yes you know so just the way forward contracts work for every commodity you can think of even though you can't pick up your oil without showing the irrevocable letter of credit so these are not spot transactions these are not forward transactions these are just transactions that are financed commodity transactions that are not being conducted on regulated exchanges and the very purpose of section two c to d is to put those transactions on a regulated exchange what i'd like to come back to though is that court has already determined that monica is arguably covered by the staff here that it's method of delivery is not actual delivery under the exception to to see to there's nothing more for the district court to do there if you were to remain and citing said can you can you just address this one argument you made about disclosing this information that the c of t c will will will disclose information therefore competitors would have access to it by law we are certainly not allowed to do that when we conduct an investigation in our statute requires that information to be kept confidential so the likelihood of that happening is remote because our statute prevents it and nics has the on producing information to the theater to see it under the subpoena and so are you representing that  request for filed under the freedom of information act c f t c would absolutely not comply i cannot imagine that they would that is an exception in on whether or not the question ok and except in representing on but you but you think that that  have control to which they're entitled over that goal because the goal back my question is whether that concern of yours is rooted in something in the commodity exchange  me clarify that that the agency is concerned is that these transactions are being conducted off exchange just these bilateral transactions where there are opportunities for saying that they do not arguably do not meet that exception from statutory coverage because it appear that monic says method of delivery which involves is passed through mailing of a title document doesn't get the customer anything except for confirmation of its trading position and mannix computer system and the court with the court the liver and you're concerned that you're not certain but you're concerned that maybe there's no actual delivery here what i'm saying is that they are with arguably within the statutory coverage sufficient to affirm the district court's order ordering full compliance with the statue because arguably going to fix not my question is ok is actual delivery  i don't want irritate your out of yes it is a concern because it is a statutory exception it's an affirmative defense so it's something that we're investigating if they need actual delivery they're not within the statute and we might lose if we question in thirty years in this is under spewed there's never been a customer suggesting that the metal wasn't delivered it's never happened that's number one number two be the title document is more than just that there was a purchase the title document says the title was passed to the customer and it's been actually delivered to the depository so just to be clear and that's in the papers but i'm sure counsel inadvertently made a mistake on it with  there's no argument anymore and in fact they rely on judge magistrate judge shaker's analysis but he never suggested any fact at all and he certainly didn't adopt their security transaction regime as being a basis for there being no actual delivery all he did did was refer to the hunter weiss case and unfortunately although he acknowledged that that was another situation he used the word constructive to say that he found that there may be constructive delivery but he didn't indicate where or why and furthermore in terms of finding coverage he made a mistake  and zellner makes it real clear the fact that there is a remedy under section two doesn't or all mean that there is anything close to jurisdiction or coverage so with respect to all those issues i just wanted to clarify and finally with respect to answering i think it was your question judge posner is there any link between anything in the customer track record and the question of actual delivery as congress has congress to find it she did not give you an answer the fact that anything could happen that anything is a possibility that something may be there as zellner pointed out is not enough there has to be some reason and so far in all the papers and also before judge chamber and also before this court they have not suggested any link any connection anything that would suggest there is any relationship between customer track records and the of what of what congress said actual delivery exams they are totally notifying the