Opinion ID: 478562
Heading Depth: 2
Heading Rank: 1

Heading: The Proceedings Leading to the Granting of the Permanent Injunction

Text: 7 The Commission promptly moved for and was granted preliminary injunctive relief against defendants' continuation of their commodity options transactions. In a Memorandum Order filed on July 13, 1979, and published at Commodity Futures Trading Commission v. Economou, Am. Bd. of Trade, 473 F.Supp. 1177, the district court construed the Act, in light of its language and legislative history, to extend to options on the underlying commodities as well as options on futures contracts, and to cover options to buy and sell foreign currencies. Finding it clearly likely that defendants would continue their challenged activities unless enjoined, the court entered an order preliminarily enjoining defendants, inter alia, 8 (a) from accepting money, securities, or property (or extending credit in lieu thereof) from any person in connection with the purchase or sale of any commodity option; [and] (b) from soliciting and accepting orders for the purchase or sale of commodity options and from supervising persons so engaged 9 .... 10 Id. at 1178. 11 In October 1981, having granted the Commission's motion to strike defendants' affirmative defenses and denied defendants' motions to file amended answers on the ground that they failed to state viable constitutional defenses, the district court found that there were no genuine issues of material fact as to the unlawfulness of defendants' activities. It therefore granted the Commission's motion for partial summary judgment making the preliminary injunction permanent, adopting the findings of fact and conclusions of law set forth in its order granting the preliminary injunction. As incorporated into the final judgment in 1985, defendants were enjoined from 12 (a) offering to enter into, entering into, or confirming the execution of any commodity option transaction involving any commodity regulated under the Act; 13 (b) accepting money, securities or property (or extending credit in lieu thereof) from any person in connection with the purchase or sale of any commodity option; 14 (c) soliciting or accepting orders for the purchase or sale of commodity options, or from supervising persons so engaged; and 15 (d) refusing to produce for inspection by authorized representatives of the Commission records that Commission regulations require to be kept; 16 in violation of Sections 4c(b) and 4c(c) of the Commodity Exchange Act, as amended, 7 U.S.C. Secs. 6c(b) and 6c(c) (1982), and Regulations 32.7(e) and 32.11 promulgated under the Act, 17 C.F.R. Secs. 32.7(e) and 32.11 (1983).