Case 1:25-cv-01283-ABA Document 26 Filed 05/09/25 Page 11 of 36
III. T HE C OMMODITY F UTURES T RADING C OMMISSION R EGULATES C OMMODITY F UTURES AND S WAPS , N OT S PORTS W AGERING .
The Commodity Exchange Act (“CEA”), 7 U.S.C. §§ 1, et seq. , provides federal regulation
focused primarily on commodity futures. “Commodity” under the CEA includes agricultural
products such as wheat, cotton, rice, corn, butter, eggs, livestock, and “all other goods and articles
. . . and 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 is a Depression Era statute enacted in 1936 as
a successor to the Grain Futures Act, designed to control trading in agricultural commodities –
other goods, services, rights, and interests were added later.
Congress amended the CEA in 1974 to create the Commodity Futures Trading Commission
(“CFTC”) and grant the CFTC “exclusive jurisdiction” over commo dity futures traded on
registered exchanges. History of the CFTC: US Futures Trading and Regulation Before the
Creation of the CFTC, https://www.cftc.gov/About/HistoryoftheCFTC/history_precftc.html (last
visited May 6, 2025);
History of the CFTC: CFTC History in the 1970s,
https://www.cftc.gov/About/HistoryoftheCFTC/history_1970s.html (last visited May 7, 2025);
CFTC v. McDonnell , 287 F.Supp.3d 213, 225 (E.D. N.Y. 2018). The Supreme Court has explained
that this exclusive- jurisdiction provision was “intended only to consolidate federal regulation of
commodity futures trading in the Commission” and to “separate the functions o f the [CFTC] from
those of the [SEC] and other regulatory agencies.” Merrill Lynch, Pierce, Fenner & Smith, Inc. v.
Curran , 456 U.S. 353, 386 – 87 (1982). I ts purpose was “to remedy the confusion about whether
certain types of commodities transactions came within the definition of a security and thus subject
to regulation under the s ecurities laws.” R. J. Hereley & Son Co. v. Stotler & Co. , 466 F. Supp.
345, 347 (N.D. Ill. 1979).
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