Court Opinion

ID: 2996486
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:29:10.296544+00
Date Added: 2024-06-11T09:32:59.544131
License: Public Domain

In the
    United States Court of Appeals
                For the Seventh Circuit
                          ____________

No. 02-3722
STEVEN C. BRENNER and JAMI WEISNER BRENNER,
                                                        Petitioners,
                                v.

COMMODITY FUTURES TRADING COMMISSION,
                                                    Respondent.
                          ____________
               Petition for Review of an Order of the
              Commodity Futures Trading Commission
                             No. 00-08.
                          ____________
        ARGUED MAY 12, 2003—DECIDED JULY 30, 2003
                      ____________

    Before BAUER, KANNE, and WILLIAMS, Circuit Judges.
  KANNE, Circuit Judge. Steven Brenner and his wife Jami
Weisner Brenner1 petition this Court to review the decision
of the Commodity Futures Trading Commission (the “Com-
mission”) finding them liable for violations of the Commod-
ity Exchange Act (the “Act”) and imposing sanctions

1
  Both the Administrative Law Judge’s and the Commission’s
opinions refer to Steven Brenner as “Brenner” and Jami Weisner
Brenner as “Weisner.” For the convenience of the reader, we will
continue to refer to the petitioners in this manner.
2                                              No. 02-3722

pursuant to those liability determinations. The petitioners
argue that there was insufficient evidence to support the
entry of summary disposition against them, and that even
had there been enough evidence, the Commission erred in
imposing sanctions in the amount and manner it did. For
the following reasons, we reject the petitioners’ appeal and
affirm the decision of the Commission on both the findings
of liability and the imposition of sanctions.

                        HISTORY
  Steven Brenner is no stranger to the legal process
surrounding the trading of commodity futures. The legal
quagmire in which the Brenners find themselves today
began back in 1986, when Brenner was ordered by the
Commission to pay damages for churning a customer’s
account. Wagner v. Commonwealth Commodities Corp.,
CFTC Docket No. 85-R91, 1986 CFTC LEXIS 19, at *6 (ALJ
Dec. 19, 1986). When he failed to satisfy that judgment
against him, the Commission placed him on its Sanctions in
Effect List. See In re Brenner, CFTC Docket No. 90-7, 1990
CFTC LEXIS 143, at *1-2 (CFTC Mar. 27, 1990). Once
added to that list, Brenner was automatically barred from
trading on any markets regulated by the Commission. See
7 U.S.C. §18(f) (2003).
  The automatic trading ban, however, did not deter
Brenner. Despite receiving notice of his placement on the
sanctions list and the resulting automatic trading ban,
Brenner continued to trade on domestic futures markets
through several futures commission merchants (“FCMs”). In
March 1990, the Commission was forced to bring another
complaint against Brenner for violating the trading ban. In
re Brenner, 1990 CFTC LEXIS 143, at *3-4. Brenner failed
to answer the complaint, and an Administrative Law Judge
(“ALJ”) held him in default and imposed sanctions including
No. 02-3722                                                      3

a cease-and-desist order, a 10-year trading ban, and a
$10,000 civil monetary penalty. In re Brenner, CFTC Docket
No. 90-7, 1990 CFTC LEXIS 380 (ALJ Aug. 16, 1990).
  Still not deterred, Brenner opened an account in 1992
under his wife’s name and, posing as her, traded on
Commission-regulated markets. In July 1992, the Commis-
sion filed an action in the United States District Court for
the Northern District of Illinois, alleging that Brenner used
a fictitious name to trade futures contracts in violation of
the 1990 trading ban. On July 7, 1992, the district court
entered an order of permanent injunction against Brenner.
See In re Brenner, CFTC Docket No. 90-7, 1995 CFTC
LEXIS 293, at *4 (CFTC Nov. 15, 1995). Over the next two
years, Brenner continued trading in violation of the court
order, and the U.S. Department of Justice pursued criminal
prosecution of Brenner under 18 U.S.C. § 401 for disobeying
a lawful order of a court. See In re Brenner, CFTC Docket
No. 00-08, 2002 CFTC LEXIS 137, at *4 (CFTC Oct. 2,
2002). In December 1996, Brenner pleaded guilty to trading
in violation of the injunction and was sentenced to weekend
detention for one month and two years probation. Id. at
*4-5.
  On March 30, 2000, the Commission issued yet another
complaint against Brenner—the complaint giving rise to
this appeal—alleging that from January 1995 through
October 1999, Brenner violated Section 8b of the Act by
trading on Commission-regulated markets in violation of
the Commission’s 1990 order imposing the ten-year trading
ban.2 The complaint additionally alleged that Weisner

2
  Section 8b provides: “It shall be unlawful for any person,
against whom there is outstanding any order of the Commission
prohibiting him from trading on or subject to the rules of any
registered entity, to make or cause to be made in contravention of
such order, any contract for future delivery of any commodity, on
                                                     (continued...)
4                                                      No. 02-3722

willfully aided and abetted Brenner’s illegal trading, thus
incurring her own liability pursuant to Section 13(a) of the
Act.3 By May 2000, neither Brenner nor Weisner had re-
sponded to the complaint (having instead filed a motion to
dismiss and a motion for a more definite statement), and
the ALJ hearing the case ordered them to show cause why
a default judgment should not be entered against them.
  Rather than answer, Brenner and Weisner asserted three
privileges as the basis for refusing to admit or deny the
allegations in the Commission’s complaint: (1) the Fifth
Amendment privilege against self-incrimination; (2) the
privilege against “adverse spousal testimony”; and (3) the
privilege protecting confidential marital communications.
The Commission’s Division of Enforcement (the “Division”)
later served Brenner and Weisner with separate requests
for admissions, but both asserted the same privileges as the
basis for refusing to respond.
  In October 2000, the Division moved for summary dis-
position, pursuant to Commission Rule 10.91,4 arguing

2
  (...continued)
or subject to the rules of any registered entity.” 7 U.S.C. § 12b
(2003).
3
  Section 13(a) provides: “Any person who . . . willfully aids, abets,
counsels, commands, induces, or procures the commission of, a
violation of any of the provisions of this Act, or any of the rules,
regulations, or orders issued pursuant to this Act . . . may be held
responsible for such violation as a principal.” 7 U.S.C. § 13c(a)
(2003).
4
  A motion for summary disposition under Commission Rule
10.91 is similar to a motion for summary judgment under Federal
Rule of Civil Procedure 56. Rule 10.91 provides that summary
disposition shall be granted “if the undisputed pleaded facts,
affidavits, other verified statements, admissions, stipulations, and
depositions, and matters of official notice show that (1) there is no
                                                       (continued...)
No. 02-3722                                                        5

that it had presented undisputed facts establishing that
while Brenner was subject to the Commission’s 1990 trad-
ing ban, he repeatedly traded futures on markets regulated
by the Commission, using accounts opened under various
assumed names, including that of his wife. The Division
further argued that the undisputed facts demonstrated that
Weisner knowingly assisted her husband in opening such
accounts and in allowing him to trade under her name.
  In support of its motion for summary disposition, the
Division offered documents from the accounts allegedly
traded by Brenner, deposition testimony, and sworn state-
ments from individuals who identified Brenner as the
individual who traded certain accounts. The Division also
drew adverse inferences from the petitioners’ failure to
answer the allegations in the complaint or to respond to the
requests for admissions by asserting various privileges. The
Division asserted that its evidence demonstrated that
Brenner had traded an account opened under the name
Ronald Boylan at First Commercial Financial Group, Inc.
(the “Boylan Account”), and an account opened under his
wife’s name at Peregrine Financial Group (the “Weisner-
Peregrine Account”), just eight days after the Boylan Ac-

4
  (...continued)
genuine issue as to any material fact, (2) there is no necessity that
further facts be developed in the record, and (3) such party is
entitled to a decision as a matter of law.” 17 C.F.R. § 10.91(e)
(2003). See also In re Zuccarelli, CFTC Docket No. SD 97-3, 1999
CFTC LEXIS 105, at *9 (CFTC May 24, 1999) (“The Commission’s
summary disposition procedures are patterned after and closely
track the summary judgment procedures of Federal Rule of Civil
Procedure 56.”).
6                                                  No. 02-3722

count was closed.5 The Division also identified four other
accounts opened in Weisner’s name, which it alleged were
actually traded by Brenner.6
  Brenner and Weisner filed a joint opposition to the
Division’s motion, as well as their own motion for summary
disposition. They argued that the Division had failed to
present sufficient evidence to establish that Brenner had
violated the Commission’s trading ban. They suggested that
the Division’s evidence could be read to suggest that
Brenner at most used the accounts at issue to trade on
foreign commodities markets, those not regulated by the
Commission and thus outside the scope of its ban, and that
only Weisner used the accounts to trade in the regulated
domestic markets. Brenner and Weisner also objected to the
Division drawing adverse inferences from the assertion of
their Fifth Amendment privilege.
  In March 2001, the ALJ issued his decision on the cross-
motions for summary disposition, finding liability on the
part of both Brenner and Weisner and imposing sanctions
pursuant to the liability determinations. The ALJ found
that the testimony, declarations, and affidavits of the
various witnesses, together with the failure of the peti-
tioners to respond to the Division’s discovery requests,
“establish[ed] conclusively that there is no genuine issue as
to any material fact.” In re Brenner, CFTC Docket No. 00-
08, 2001 CFTC LEXIS 40, at *3 (ALJ Apr. 2, 2001). The

5
  While the Boylan Account was still open, Peregrine Financial
Group became the successor in interest to the First Commercial
Financial Group.
6
  In May 1995, an account in Weisner’s name was opened at LFG,
LLC (the “LFG Account”); in April 1997, two accounts in Weisner’s
name were opened at Spike Trading Company (collectively, the
“Spike Account”); and in December 1997, another account in
Weisner’s name was opened at ED&F Man (the “Man Account”).
No. 02-3722                                                 7

ALJ first noted that both marital privileges, as well as the
Fifth Amendment privilege against self-incrimination, are
only available in criminal proceedings. Id. at *5-6 (citing,
inter alia, Ryan v. Commissioner, 568 F.2d 531, 543 (7th
Cir. 1977)). As for the petitioners’ claim that the Division’s
undisputed factual assertions fit an innocent scenario, the
ALJ rejected that argument as “an unsupported theoretical
possibility” insufficient to defeat summary disposition. Id.
at *7.
  Finding that the Division had presented evidence suffi-
cient to establish liability, and that neither Brenner nor
Weisner had raised an issue of material fact as to the
Division’s allegations, the ALJ made forty-nine findings of
fact and six conclusions of law, ultimately holding that
Brenner violated Section 8b of the Act and that Weisner
aided and abetted his actions, making her liable under
Section 13(a). Summary disposition was entered against
Brenner with respect to the Boylan Account, the Weisner-
Spike Account, and the LFG Account, and against Weisner
with respect to the Spike and LFG Accounts. Brenner and
Weisner’s cross-motion was denied. The ALJ then imposed
sanctions on both parties, including cease-and-desist orders
against both Brenner and Weisner and a civil monetary
penalty of $100,000 against Brenner.
  Both the Division and the petitioners appealed the
decision to the full Commission. Brenner and Weisner
claimed that the record did not support the ALJ’s liability
findings (specifically, that the Division had not rebutted the
proffered innocent explanation for its factual assertions),
that the ALJ had erroneously ruled that they could not
assert their Fifth Amendment privilege in an administra-
tive proceeding, and that the Division withheld exculpatory
evidence. The Division argued that the sanctions imposed
by the ALJ were inadequate given the nature of the viola-
tions.
8                                                No. 02-3722

   In reviewing the ALJ’s initial decision, the Commission
first affirmed the liability determination. After noting that
the ALJ’s decision was “difficult to interpret,” the Commis-
sion stated that it was limiting its review to those allega-
tions that were “reliably resolved without a hearing”—that
is, those issues appropriate for summary disposition. In re
Brenner, 2002 CFTC LEXIS 137, at *14-15. It dismissed the
remaining charges and vacated the ALJ’s liability findings
with respect to those allegations. Id. at *28. The Commis-
sion began its analysis of the remaining claims by noting
that drawing adverse inferences from the invocation of one’s
Fifth Amendment privilege cannot by itself support
a finding of liability. It acknowledged, however, that in
appropriate circumstances, such as when viewed in combi-
nation with other evidence, “[i]t is permissible to rely on an
adverse inference when respondent’s silence is only one of
a number of factors and is given no more weight than is
warranted by the record.” Id. at *18. The Commission went
on to review the evidence offered by the Division, as well as
the arguments made by Brenner and Weisner in opposition,
and then affirmed the liability determinations against
Brenner with respect to the Boylan Account, the Spike
Account, and the LFG Account, and against Weisner with
respect to the LFG Account. Id. at *27-28.
   The Commission then addressed the sanctions imposed
by the ALJ. In addition to affirming the cease-and-desist
orders, the Commission felt it necessary to impose a
lifetime trading ban on Brenner. Finally, the Commission,
noting the severity of the violations and its intention to
deter future violations, imposed a $300,000 civil monetary
penalty on Brenner and a $100,000 civil monetary penalty
on Weisner. Brenner and Weisner timely petitioned this
Court for review of the Commission’s opinion and order.
No. 02-3722                                                  9

                        ANALYSIS
  Our jurisdiction to review the order from the Commission
derives from Section 6(c) of the Act, which provides in part
that the federal courts of appeals “shall have jurisdiction to
affirm, to set aside, or modify the order of the Commission,
and the findings of the Commission as to the facts, if
supported by the weight of evidence, shall in like manner be
conclusive.” 7 U.S.C. § 9 (2003). In reviewing an order of the
Commission, two standards of review are employed by this
Court: “If the question presented is of the sort that courts
commonly encounter, de novo review is proper. On the other
hand, if the Commission’s decision was peculiarly within its
area of expertise, we apply a deferential standard and will
affirm so long as the decision is reasonable.” Elliot v. CFTC,
202 F.3d 926, 932 (7th Cir. 2000) (quotation and citations
omitted). As the issues in this case—the sufficiency of the
evidence offered to support summary disposition, the
existence of appellate jurisdiction, and the appropriateness
of sanctions—are generally familiar to this Court, we will
employ a de novo standard of review.

                A. Liability Determination
  Petitioners’ first claim in this appeal is that there was
insufficient evidence presented by the Division to support
the entry of summary disposition against them as to
liability under Sections 8b and 13(a) of the Act. They devote
a significant portion of their briefs to arguing that liability
must be supported by more than “suspicious circumstances
suggesting the mere possibility of knowing wrongdoing” and
that “suspicion, imagination, guess work, speculation, and
conjecture cannot do the duty of proof.” (Pet. Br. at 9-10.)
No one disagrees with that proposition. The problem for
Brenner and Weisner is that the Division has alleged more
than just suspicious circumstances, speculation, or con-
jecture—the record indicates that the Division has offered
10                                               No. 02-3722

evidence sufficient to support the Commission’s findings of
liability at the summary disposition stage.
  We first note that Brenner admits to violating Section 8b
of the Act with respect to the Boylan account. See Pet. Br.
at 10 n.3 (“Brenner’s admission regarding that account
warrants a summary disposition on that account. . . .”).
That admission by itself is sufficient to support the Commis-
sion’s finding of liability as to Brenner.
  As for the Spike Account, the Division presented suffi-
cient evidence to support the determination that Brenner
traded on domestic markets using that account. The Divi-
sion’s evidence established that in April 1997, an account
was opened at Spike Trading in Weisner’s name, with her
signature on account documents. The Division presented
trading records which established that this account was
used to trade on domestic markets regulated by the Com-
mission. Finally, the Division offered the testimony of two
Spike employees who tied Brenner to the Spike Account. We
believe that this evidence was sufficient to support the
Commission’s finding that Brenner traded on domestic
markets through this account.
  With respect to the LFG Account, the Division offered
uncontroverted evidence that an account at LFG was
opened in Weisner’s name in May 1995, and that the
account was used to trade on domestic futures markets. The
Division offered the testimony of LFG employee Luigi
Auriemma, who testified that he believed Brenner traded
on this account. The Commission found that this evidence,
considered in combination with petitioners’ refusal to re-
spond to the evidence by asserting various privileges, was
sufficient to establish liability. Once again, neither Brenner
nor Weisner have pointed to any factual issue with respect
to this evidence.
  The evidence was also sufficient to establish that Weisner
knew that Brenner was prohibited from trading on Com-
No. 02-3722                                               11

mission-regulated futures markets and yet still assisted
her husband in trading in violation of that prohibition.
Specifically, the Commission presented the testimony of
LFG employee Auriemma, who stated that, based on his
contacts with both Brenner and Weisner, he believed
Weisner was aware that Brenner was trading on her
account.
   Once the Division had presented evidence to establish
liability, the burden fell to the petitioners to come forward
with their own evidence creating some factual dispute. “The
party opposing summary disposition may not rely on mere
allegations, or some metaphysical doubt as to the material
facts, but must come forward with sufficient evidence to
demonstrate a genuine dispute of material fact.” See In re
Staryk, CFTC Docket No. 95-5, 1997 CFTC LEXIS 294, at
*21 (CFTC, Dec. 18, 1997) (citations and quotations omit-
ted) (emphasis added). The petitioners have failed to offer
any evidence that would create an issue as to the validity of
the Division’s case. Their response amounts to little more
than calling attention to potential weak points in the
Division’s proof, coupled with their own speculation as to
why it should not be believed or what innocent explanation
it could support. But a party opposing summary judgment
must do more than simply point to weaknesses in the
movant’s case or raise some “metaphysical doubt” as to the
evidence offered—the non-movant must affirmatively raise
an issue of material fact.
  Though we take the evidence in a light most favorable to
the petitioners, we believe that the evidence offered by the
Division, combined with the petitioners’ failure to respond
to that evidence by invoking various privileges, see Daniels
v. Pipefitters’ Ass’n Local Union No. 597, 983 F.2d 800, 802
(7th Cir. 1993) (“ ‘[T]he Fifth Amendment does not forbid
inferences against parties to civil actions when they refuse
to testify in response to probative evidence offered against
them.” (quoting Baxter v. Palmigiano, 425 U.S. 308, 318
12                                               No. 02-3722

(1976))), is sufficient to support the findings of liability
made by the Commission. The petitioners failed to raise any
issue of material fact with respect to this evidence; there-
fore, summary disposition on the issue of liability was
appropriate.

              B. Jurisdiction over the Appeal
                  of the Sanctions Order
  Brenner and Weisner next argue that neither the Com-
mission nor this Court had jurisdiction to hear the Divi-
sion’s appeal of the ALJ’s sanction order, due to the Divi-
sion’s failure to file an effective notice of appeal. Our
analysis of this argument requires a brief recounting of the
timing of events following the ALJ’s issuance of his initial
decision. The ALJ issued that initial decision on March 30,
2001, but on April 2, 2001, issued an order of correction
modifying the initial decision. Both the petitioners and the
Division filed notices of appeal on April 16, 2001—as noted
above, the petitioners sought review of the ALJ’s liability
determination, while the Division challenged the adequacy
of the sanctions imposed. In addition to its notice of appeal,
the Division filed a motion for clarification of the ALJ’s
opinion and a motion to stay the appellate proceedings and
remand to the ALJ to allow for the resolution of the motion
for clarification. On April 17, 2001, before the full Commis-
sion had acted on the Division’s motion to stay the appellate
proceedings and before the petitioners responded to the
Division’s motions, the ALJ apparently granted the motion
to clarify offered by the Division, once again modifying its
decision.
  Petitioners contend that the Division’s April 16th notice
of appeal was ineffective to establish the Commission’s
jurisdiction over the Division’s claims for two reasons. First,
they argue that the actual date of final disposition for
determining the timeliness of an appeal was April 17, 2001
No. 02-3722                                                13

(the date on which the ALJ made the final modification to
the initial decision) rather than March 30, 2001 (the date
the ALJ originally issued the initial decision) or April 2,
2001 (the date the ALJ sua sponte corrected his initial
decision). See 17 C.F.R. § 10.102(a) (2003) (providing that a
party may appeal “an initial decision or a dismissal or other
final disposition of the proceeding by the Administrative
Law Judge as to any party” (emphasis added)). Brenner and
Weisner argue that because the Division filed its notice of
appeal on April 16th and then failed to file a new notice of
appeal after the final modified opinion was entered on April
17th, the ALJ’s initial decision became final with respect to
the Division’s claims. See 17 C.F.R. § 10.84(c) (2003).
   Second, Brenner and Weisner argue that when the ALJ
granted the Division’s motion for clarification on April 17th,
it mooted the previously filed notices of appeal, necessitat-
ing the filing of new notices—if a party still wished to
pursue an appeal. The petitioners note that they filed a new
notice of appeal on May 2, 2001, while the Division never
did (they suggest that the Division was satisfied with the
results of its motion for clarification and thus saw no need
to appeal the ALJ’s decision to the full Commission).
Therefore, petitioners argue, the Division’s arguments on
appeal should not have been considered by the Commission.
  We disagree that the Commission lacked jurisdiction over
the Division’s appeal. First, we note that the modification
to the initial decision issued by the ALJ on April 17th
included no substantive changes in either the factual
findings or legal conclusions; rather, the modification was
limited to obvious errors in citations to statutory and
regulatory provisions. Such a modification is more in the
nature of a clerical correction permitted under Federal Rule
of Civil Procedure 60, which provides district courts with
the authority to correct clerical mistakes in judgments and
orders, even during the pendency of an appeal. See FED. R.
CIV. P. 60(a) (2003). Such modifications do not restart the
14                                               No. 02-3722

clock on the timeliness of an appeal. See Local 1545 v.
Inland Steel Coal. Co., 876 F.2d 1288, 1292 n.4 (7th Cir.
1989) (“The entry of an order correcting a clerical mistake
pursuant to Rule 60(a) does not start the time for appeal
running again.” (citations omitted)).
   In addition, we are inclined to treat the appeal of an
ALJ’s initial decision to the full Commission just as we
would an appeal from a district court to a circuit court. In
both cases, the filing of a notice of appeal divests the lower
court of jurisdiction and shifts control over the issues on
appeal to the appellate court. See Grube v. Lau Indus., Inc.,
257 F.3d 723, 731 (7th Cir. 2001) (quoting Kusay v. United
States, 62 F.3d 192, 193 (7th Cir. 1995) (“[T]he filing of a
notice of appeal is an event of jurisdictional significance—it
confers jurisdiction on the court of appeals and divests the
district court of its control over those aspects of the case
involved in the appeal.”)). Given that, once the Division
filed its notice of appeal, jurisdiction automatically vested
in the Commission to consider the sanctions issue raised by
the Division. Thus, even if we were to consider the ALJ’s
April 17th modification as anything other than a clerical
correction, the ALJ would have been without jurisdiction to
change his decision and his action would have been invalid.
  Finally, we note that any party may appeal a decision by
an ALJ to the Commission. See 17 C.F.R. § 10.102(a) (2003).
And once an appeal has been taken, the Commission has
broad powers to review the initial decision. See 17 C.F.R.
§ 10.104(b) (2003) (“On review, the Commission may affirm,
reverse, modify, set aside or remand for further proceed-
ings, in whole or in part, the initial decision by the Admin-
istrative Law Judge and make any findings or conclusions
which in its judgment are proper based on the record in the
proceeding.”). Brenner and Weisner acknowledge that they
followed the dictates of Rule 10.102 and filed an effective
notice of appeal on May 2, 2001. Even assuming that the
No. 02-3722                                                     15

Division’s failure to re-file its notice thereby deprived the
Commission of jurisdiction over its appeal, the petitioners’
appeal properly put the ALJ’s initial decision before the
Commission. Given the Commission’s broad authority once
an appeal is before it, consideration of the adequacy of the
sanctions imposed by the ALJ was proper.

                   C. The Sanctions Order
   Finally, Brenner and Weisner contest the imposition of
the civil monetary penalties against them. They argue that
the Commission abused its discretion by imposing increased
sanctions, greater than those initially imposed by the ALJ,
without first conducting a hearing regarding the petitioners’
financial worth and the collectibility of any financial
penalty. “With regard to the agency’s imposition of sanc-
tions, the choice of sanction [is] not to be overturned unless
the Court of Appeals might find it unwarranted in law or
. . . without justification in fact . . . . If the agency’s sanction
falls within the statutory limits, it must be upheld unless it
reflects an abuse of discretion.” LaCrosse v. CFTC, 137 F.3d
925, 929 (7th Cir. 1998) (quotations and citations omitted).
   The Act authorizes the Commission to impose civil money
penalties for each violation of the Act established by the
record. 7 U.S.C. § 9 (2003). After reviewing the sanctions
imposed by the ALJ, the Commission increased the penalty
assessed against Brenner from $100,000 to $300,000 and
imposed a civil monetary penalty against Weisner in the
amount of $100,000. In reaching its decision to increase the
sanctions, the Commission took into account the ALJ’s
assessment of the gravity of the violations at issue, as well
as the sanctions he initially imposed, see In re Brenner,
2002 CFTC LEXIS 137, at *24-25, but correctly noted that
it had the authority to impose whatever sanctions it deemed
appropriate based on its de novo review of the record. See In
re Grossfeld, CFTC Docket No. 89-23, 1996 CFTC LEXIS
16                                                 No. 02-3722

242, *39-40 (CFTC Dec. 10, 1996) (“[W]e wish to make it
clear that in this case and in the future we will determine
sanctions de novo rather than defer to the assessment of
Commission ALJs.”). Petitioners complain that it was an
abuse of discretion for the Commission to impose such an
increase without first holding a hearing on the issue.
  In formulating the total amount of the monetary penalty
to be imposed, if any, the Commission is directed by the Act
to “consider the appropriateness of such penalty to the
gravity of the violation.” 7 U.S.C. § 9a(1) (2003). The Act
does not require that a separate hearing be held at the
sanctions stage of adjudication. In fact, in Gimbel v. CFTC,
872 F.2d 196, 200 (7th Cir. 1989), we held that neither the
Constitution, nor the Commodity Exchange Act, nor the
Commission’s own decisions require that a defendant be
afforded a separate hearing on sanctions apart from a
hearing on liability.
  Brenner and Weisner, however, direct our attention to
another portion of our decision in Gimbel, which, they
argue, requires the Commission to develop a satisfactory
record on the issue of the collectibility of a proposed
sanction before it actually imposes one. Id. at 201. In that
case, we reversed the imposition of the monetary penalty
because of the failure to develop the record on the issue of
collectibility. Id. But the petitioners here fail to note that in
1992 Congress enacted several amendments to the Act,
including a change in the criteria to be considered before
imposing any financial penalty. See In re Nikkhah, CFTC
Docket No. 95-13, 2003 CFTC LEXIS 45, at *3 n.2 (CFTC
Sept. 26, 2000) (noting that the Futures Trading Practices
Act of 1992 altered the list of factors to be considered in
determining the appropriate amount of any civil penalty).
Under the new provisions of the Act, the Commission is to
set an appropriate sanction based on the “gravity of the
violation”—the financial worth of the defendant or the
collectibility of any fine are no longer relevant consider-
No. 02-3722                                                17

ations. See 7 U.S.C. § 9a (2003). Because the wrongdoing at
issue in this case occurred after the effective date of the
amendment, no consideration of collectibility was necessary.
  In this case, the Commission engaged in a thoughtful
consideration of the gravity of Brenner and Weisner’s
offenses, see In re Brenner, 2002 CFTC LEXIS 137, at *24-
27, concluding that “[l]ower, incremental sanctions have
proved completely ineffective at deterring additional vio-
lations by Brenner. Consequently, especially severe sanc-
tions are appropriate.” Id. at *26-27. Considering the nature
of the violations at issue here, the petitioners’ long history
of flouting the Commission’s authority, and the apparent
unwillingness to reform their conduct (one need only review
the history section of this opinion to see how ineffective
previous sanctions were), the Commission did not abuse its
discretion in imposing the civil monetary penalties that it
did.

                      CONCLUSION
  For the foregoing reasons, the Commission’s liability
determinations and the sanctions imposed on Brenner and
Weisner are AFFIRMED.

A true Copy:
       Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit

                   USCA-02-C-0072—7-30-03