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U.S. Code as of:
01/03/05
Section 6b. Fraud, false reporting, or deception prohibited
(a) Contracts designed to defraud or mislead; bucketing orders
It shall be unlawful (1) for any member of a registered entity,
or for any correspondent, agent, or employee of any member, in or
in connection with any order to make, or the making of, any
contract of sale of any commodity in interstate commerce, made, or
to be made, on or subject to the rules of any registered entity,
for or on behalf of any other person, or (2) for any person, in or
in connection with any order to make, or the making of, any
contract of sale of any commodity for future delivery made, or to
be made, for or on behalf of any other person if such contract for
future delivery is or may be used for (A) hedging any transaction
in interstate commerce in such commodity or the products or
byproducts thereof, or (B) determining the price basis of any
transaction in interstate commerce in such commodity, or (C)
delivering any such commodity sold, shipped, or received in
interstate commerce for the fulfillment thereof -
(i) to cheat or defraud or attempt to cheat or defraud such
other person;
(ii) willfully to make or cause to be made to such other person
any false report or statement thereof, or willfully to enter or
cause to be entered for such person any false record thereof;
(iii) willfully to deceive or attempt to deceive such other
person by any means whatsoever in regard to any such order or
contract or the disposition or execution of any such order or
contract, or in regard to any act of agency performed with
respect to such order or contract for such person; or
(iv) to bucket such order, or to fill such order by offset
against the order or orders of any other person, or willfully and
knowingly and without the prior consent of such person to become
the buyer in respect to any selling order of such person, or
become the seller in respect to any buying order of such person.
(b) Buying and selling orders for commodity
Nothing in this section or in any other section of this chapter
shall be construed to prevent a futures commission merchant or
floor broker who shall have in hand, simultaneously, buying and
selling orders at the market for different principals for a like
quantity of a commodity for future delivery in the same month
executing such buying and selling orders at the market price:
Provided, That any such execution shall take place on the floor of
the exchange where such orders are to be executed at public outcry
across the ring and shall be duly reported, recorded, and cleared
in the same manner as other orders executed on such exchange: And
provided further, That such transactions shall be made in
accordance with such rules and regulations as the Commission may
promulgate regarding the manner of the execution of such
transactions.
(c) Inapplicability to transactions on foreign exchanges
Nothing in this section shall apply to any activity that occurs
on a board of trade, exchange, or market, or clearinghouse for such
board of trade, exchange, or market, located outside the United
States, or territories or possessions of the United States,
involving any contract of sale of a commodity for future delivery
that is made, or to be made, on or subject to the rules of such
board of trade, exchange, or market.
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