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U.S. Code as of:
01/03/05
Section 18. Complaints against registered persons
(a) Petition for actual damages
(1) Any person complaining of any violation of any provision of
this chapter, or any rule, regulation, or order issued pursuant to
this chapter, by any person who is registered under this chapter
may, at any time within two years after the cause of action
accrues, apply to the Commission for an order awarding -
(A) actual damages proximately caused by such violation. If an
award of actual damages is made against a floor broker in
connection with the execution of a customer order, and the
futures commission merchant which selected the floor broker for
the execution of the customer order is held to be responsible
under section 2(a)(1) of this title for the floor broker's
violation, such futures commission merchant may be required to
satisfy such award; and
(B) in the case of any action arising from a willful and
intentional violation in the execution of an order on the floor
of a registered entity, punitive or exemplary damages equal to no
more than two times the amount of such actual damages. If an
award of punitive or exemplary damages is made against a floor
broker in connection with the execution of a customer order, and
the futures commission merchant which selected the floor broker
for the execution of the customer order is held to be responsible
under section 2(a)(1) of this title for the floor broker's
violation, such futures commission merchant may be required to
satisfy such award if the floor broker fails to do so, except
that such requirement shall apply to the futures commission
merchant only if it willfully and intentionally selected the
floor broker with the intent to assist or facilitate the floor
broker's violation.
(2)(A) An action may be brought under this subsection by any one
or more persons described in this subsection for and in behalf of
such person or persons and other persons similarly situated, if the
Commission permits such actions pursuant to a final rule issued by
the Commission.
(B) Not later than two hundred and seventy days after October 28,
1992, the Commission shall propose and publish for public comment
such rules as are necessary to carry out subparagraph (A). In
developing such rules, the Commission shall consider the potential
impact of such actions on resources available to the reparations
system established under this chapter and the relative merits of
bringing such actions in Federal court.
(b) Rules and regulations; control over right of appeal
The Commission may promulgate such rules, regulations, and orders
as it deems necessary or appropriate for the efficient and
expeditious administration of this section. Notwithstanding any
other provision of law, such rules, regulations, and orders may
prescribe, or otherwise condition, without limitation, the form,
filing, and service of pleadings or orders, the nature and scope of
discovery, counterclaims, motion practice (including the grounds
for dismissal of any claim or counterclaim), hearings (including
the waiver thereof, which may relate to the amount in controversy),
rights of appeal, if any, and all other matters governing
proceedings before the Commission under this section.
(c) Bond requirement when complainant is nonresident; waiver
In case a complaint is made by a nonresident of the United
States, the complainant shall be required, before any formal action
is taken on his complaint, to furnish a bond in double the amount
of the claim conditioned upon the payment of costs, including a
reasonable attorney's fee for the respondent if the respondent
shall prevail, and any reparation award that may be issued by the
Commission against the complainant on any counterclaim by
respondent: Provided, That the Commission shall have authority to
waive the furnishing of a bond by a complainant who is a resident
of a country which permits the filing of a complaint by a resident
of the United States without the furnishing of a bond.
(d) Enforcement of reparation award
If any person against whom an award has been made does not pay
the reparation award within the time specified in the Commission's
order, the complainant, or any person for whose benefit such order
was made, within three years of the date of the order, may file a
certified copy of the order of the Commission, in the district
court of the United States for the district in which he resides or
in which is located the principal place of business of the
respondent, for enforcement of such reparation award by appropriate
orders. The orders, writs, and processes of such district court may
in such case run, be served, and be returnable anywhere in the
United States. The petitioner shall not be liable for costs in the
district court, nor for costs at any subsequent state of the
proceedings, unless they accrue upon his appeal. If the petitioner
finally prevails, he shall be allowed a reasonable attorney's fee,
to be taxed and collected as a part of the costs of the suit.
Subject to the right of appeal under subsection (e) of this
section, an order of the Commission awarding reparations shall be
final and conclusive.
(e) Review
Any order of the Commission entered hereunder shall be reviewable
on petition of any party aggrieved thereby, by the United States
Court of Appeals for any circuit in which a hearing was held, or if
no hearing was held, any circuit in which the appellee is located,
under the procedure provided in sections 9 and 15 of this title.
Such appeal shall not be effective unless within 30 days from and
after the date of the reparation order the appellant also files
with the clerk of the court a bond in double the amount of the
reparation awarded against the appellant conditioned upon the
payment of the judgment entered by the court, plus interest and
costs, including a reasonable attorney's fee for the appellee, if
the appellee shall prevail. Such bond shall be in the form of cash,
negotiable securities having a market value at least equivalent to
the amount of bond prescribed, or the undertaking of a surety
company on the approved list of sureties issued by the Treasury
Department of the United States. The appellee shall not be liable
for costs in said court. If the appellee prevails, he shall be
allowed a reasonable attorney's fee to be taxed and collected as a
part of his costs.
(f) Automatic bar from trading and suspension for noncompliance;
effect of appeal
Unless the party against whom a reparation order has been issued
shows to the satisfaction of the Commission within fifteen days
from the expiration of the period allowed for compliance with such
order that either an appeal as herein authorized has been taken or
payment of the full amount of the order (or any agreed settlement
thereof) has been made, such party shall be prohibited
automatically from trading on all registered entities and, if the
party is registered with the Commission, such registration shall be
suspended automatically at the expiration of such fifteen-day
period until such party shows to the satisfaction of the Commission
that payment of such amount with interest thereon to date of
payment has been made: Provided, That if on appeal the appellee
prevails or if the appeal is dismissed, the automatic prohibition
against trading and suspension of registration shall become
effective at the expiration of thirty days from the date of
judgment on the appeal, but if the judgment is stayed by a court of
competent jurisdiction, the suspension shall become effective ten
days after the expiration of such stay, unless prior thereto the
judgment of the court has been satisfied.
(g) Predispute resolution agreements for institutional customers
Nothing in this section prohibits a registered futures commission
merchant from requiring a customer that is an eligible contract
participant, as a condition to the commission merchant's conducting
a transaction for the customer, to enter into an agreement waiving
the right to file a claim under this section.
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