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United States Commodity Futures Trading Commission, et al v. the Trade Tech Insitute

UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT CALIFORNIA WESTERN DIVISION


April 8, 2011

UNITED STATES COMMODITY FUTURES TRADING COMMISSION, ET AL., PLAINTIFFS,
v.
THE TRADE TECH INSITUTE, INC., ET AL., DEFENDANTS.

The opinion of the court was delivered by: Hon. George H. King United States District Judge Central District OF California

(PROPOSED) CONSENT ORDER OF PRELIMINARY INJUNCTION AND FOR OTHER EQUITABLE RELIEF AGAINST DEFENDANTS THE TRADE TECH INSTITUTE, INC. AND TECHNOLOGY TRADING INTERNATIONAL, INC.

Plaintiffs U.S. Commodity Futures Trading Commission ("CFTC") and the Commissioner of Corporations of the State of California have filed a Complaint for Injunctive and Other Equitable Relief, Civil Monetary Penalties and Other Equitable Relief ("Complaint") (Docket No. 1) pursuant to the Commodity Exchange Act and California law. The CFTC has separately moved the Court for the entry of a preliminary injunction pursuant to its Ex Parte Emergency Application for a Statutory Restraining Order, Preliminary Injunction, and Other Related Equitable Relief Against Defendants ("Application") (Docket No. 2), the Memorandum in Support of the Ex Parte Emergency Application for a Statutory Restraining Order, Preliminary Injunction, and Other Related Equitable Relief Against Defendants ("Memorandum") (Docket No. 8) and Appendix of Exhibits Filed in Support of Application for Statutory Restraining Order, Preliminary Injunction ("Appendix") (Docket Nos. 10-19). The Court has considered the Complaint, Application, Memorandum and Appendix, as well as the entire record in this matter.

The Court finds that Defendants The Trade Tech Institute, Inc. ("Trade Tech") and Technology Trading International, Inc. ("Tech Trading") have been properly served with a copy of the Summons and Complaint. The Court further finds that Trade Tech and Tech Trading, without admitting or denying the allegations of the Complaint, consent to the entry of this Order, consent to this Court's jurisdiction over them, admit that the subject matter of this action is properly before this Court, and admit that venue lies properly with this Court. The Court also finds that Trade Tech's and Tech Trading's consent to this Order is entered into voluntarily and that no promise or threat has been made by the CFTC, or any member, officer, agent, or representative of the CFTC, to induce Trade Tech or Tech Trading to consent to this Order.

Based upon the record in this case, it appears to the Court that there is good cause to believe that Trade Tech and Tech Trading have engaged, are engaging in, or are about to engage in violations of the Commodity Exchange Act, as amended by the Food, Conservation, and Energy Act of 2008, Pub. L. No. 110-246, Title XIII (the CFTC Reauthorization Act of 2008), §§ 13101-13204, 122 Stat. 1651 (enacted June 18, 2008), to be codified at 7 U.S.C. §§ 1 et seq. (as amended, the "Act") and that this is a proper case for granting a preliminary injunction to preserve the status quo, protect affected clients from further loss and damage, and enable the CFTC to fulfill its statutory duties. Accordingly, the Court hereby finds and orders as follows.

I. JURISDICTION AND VENUE

THE PARTIES AGREE AND IT IS HEREBY ORDERED that:

1. This Court has jurisdiction over this action pursuant to Section 6c of the Act, to be codified at 7 U.S.C. § 13a-1, which provides that whenever it shall appear to the CFTC that any person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of the Act, the CFTC may bring an action in the proper district court of the United States against such person to enjoin such practice, or to enforce compliance with the Act.

2. Venue properly lies with this Court pursuant to Section 6c(e) of the Act, to be codified at 7 U.S.C. § 13a-1(e), because the acts and practices in violation of the Act have occurred and are occurring within this District.

II. PROHIBITION FROM VIOLATIONS OF THE ACT AND REGULATIONS THE PARTIES AGREE AND IT IS HEREBY ORDERED that: Trade Tech and Tech Trading, as well as all persons insofar as they are acting in the capacity of agents, servants, employees, successors, assigns, or attorneys of Trade Tech and Tech Trading, and all persons insofar as they are acting in active concert or participation with Trade Tech and Tech Trading who receive actual notice of this Order by personal service or otherwise, are hereby prohibited and restrained from directly or indirectly:

1. engaging in conduct in violation of Section 4o(1)(A) and (B) of the Act, to be codified at 7 U.S.C. § 6o(1)(A) and (B); and

2. engaging in any activity related to trading in any commodity, as that term is defined in Section 1a(4) of the Act, to be codified at 7 U.S.C. § 1a(4) ("commodity interest"), including but not limited to, the following:

A. trading on or subject to the rules of any registered entity (as that term is defined in Section 1a(29) of the Act, 7 U.S.C. § 1a(29));

B. entering into any transactions involving commodity futures, options on commodity futures, commodity options (as that term is defined in CFTC Regulation 32.1(b)(1), 17 C.F.R. § 32.1(b)(1) (2009)) ("commodity options"), and/or foreign currency (as described in Section 2(c)(2)(C)(i) of the Act, 7 U.S.C. § 2(c)(2)(C)(i)) ("forex contracts") for their own personal account or for any account in which they have a direct or indirect interest;

C. having any commodity futures, options on commodity futures, commodity options, and/or forex contracts traded on their behalf;

D. controlling or directing the trading for or on behalf of any other person or entity, whether by power of attorney or otherwise, in any account involving commodity futures, options on commodity futures, commodity options, and/or forex contracts;

E. soliciting, receiving, or accepting any funds from any person for the purpose of purchasing or selling any commodity futures, options on commodity futures, commodity options, and/or forex contracts;

F. applying for registration or claiming exemption from registration with the Commission in any capacity, and engaging in any activity requiring such registration or exemption from registration with the Commission, except as provided for in CFTC Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9);

G. acting as a principal (as that term is defined in CFTC Regulation 3.1(a), 17 C.F.R. § 3.1(a)), agent, or any other officer or employee of any person registered, exempted from registration or required to be registered with the Commission except as provided for in CFTC Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9).

III. FORCE AND EFFECT

THE PARTIES AGREE AND IT IS FURTHER ORDERED that: This Order shall remain in full force and effect until further order of this Court, and that this Court retains jurisdiction of this matter. Further, the Court's March 15, 2011 Order (granting the Application) (Docket No. 3) and the terms and conditions set forth therein are incorporated in full herein by reference and shall remain in full force and effect until further order of this Court.

IT IS SO ORDERED, at ----, on the 8th day of April 2011, at 4:30 p.m.

20110408

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