CFTC V. Gibraltar Monetary Corp. and Vicarious Liability Under the Commodity Exchange Act

November 11, 2010

This Comment analyzes CFTC v. Gibraltar Monetary Corp., a 2009 decision in which the U.S. Court of Appeals for the Eleventh Circuit introduced a control requirement into the Commodity Exchange Act’s vicarious liability provision. In so doing, the court rejected the U.S. Commodity Futures Trading Commission’s long-held totality of the circumstances approach, in which any one factor, including control, is not dispositive of an agency relationship. This decision has created an undesirable situation in which retail foreign exchange dealers and futures commission merchants need not investigate the character of their introducing entities before retaining them, allowing them to easily avoid liability for frauds committed in furtherance of mutual profit.

November 2010

No. 2

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