Case 2:25-cv-00575-APG-BNW Document 45 Filed 04/09/25 Page 11 of 17
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Securities and Exchange Commission or other regulatory authorities under the laws of the United States or of any State, or (II) restrict the Securities and Exchange Commission and such other authorities from carrying out their duties and responsibilities in accordance with such laws. Nothing in this section shall supersede or limit the jurisdiction conferred on courts of the United States or any State.
Section 2’s plain and unambiguous language grants the CFTC exclusive jurisdiction over accounts, agreements, and transactions involving swaps 3 or contracts of sale of a commodity 4 for future delivery that are traded or executed on exchanges that the CFTC has designated under section 7. The second sentence in section 2—which states that nothing in section 2 supersedes “other regulatory authorities” under state law—does not give states regulatory authority over CFTC-designated exchanges because that language is limited by the phrase “[e]xcept as hereinabove provided.” Section 2’s first sentence supersedes the SEC and state regulatory authorities’ jurisdiction for contracts on a CFTC-designated exchange. The remainder of the second sentence preserves the SEC and states’ regulatory authority over exchanges or transactions that are not covered by the CFTC’s exclusive jurisdiction. For example, the defendants could pursue an entity that offered sports or election event contracts that were not listed on a CFTC-designated exchange. 3 As relevant here, the CEA defines swaps as “any agreement, contract, or transaction . . . that provides for any purchase, sale, payment, or delivery (other than a dividend on an equity security) that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence.” 7 U.S.C. § 1a(47)(A)(ii). 4 As relevant here, the CEA defines a commodity as “all services, rights, and interests . . . in which contracts for future delivery are presently or in the future dealt in.” 7 U.S.C. § 1a(9). The CEA defines an “excluded commodity” to include “an occurrence, extent of an occurrence, or contingency . . . that is . . . beyond the control of the parties to the relevant contract, agreement, or transaction; and . . . associated with a financial, commercial, or economic consequence.” Id. § 1a(19)(iv).
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