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Maverick
Maverick, Attorney
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Experience:  20 years experience as a civil trial and appellate lawyer
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My question, is the below penalty in this section referring

Customer Question

My question, is the below penalty in this section referring to only violations of enjoining or restraining action, OR to any violation within Chapter 1 (which may have been the cause of the enjoining action)? I was fined at the same time that the enjoining action was issued using the civil penalties clause below. It is my contention, under this section, that the enjoining action must be violated before a fine can be justified?
U.S. Code - Title 7 - Chapter 1- Section 13a-1
7 U.S. Code § 13a–1 - Enjoining or restraining violations
Current through Pub. L. 114-38. (See Public Laws for the current Congress.)
· US Code
· Notes
· Authorities (CFR)
(a) Action to enjoin or restrain violations
Whenever it shall appear to the Commission that any registered entity or other person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule, regulation, or order thereunder, or is restraining trading in any commodity for future delivery or any swap, the Commission may bring an action in the proper district court of the United States or the proper United States court of any territory or other place subject to the jurisdiction of the United States, to enjoin such act or practice, or to enforce compliance with this chapter, or any rule, regulation or order thereunder, and said courts shall have jurisdiction to entertain such actions: Provided, That no restraining order (other than a restraining order which prohibits any person from destroying, altering or disposing of, or refusing to permit authorized representatives of the Commission to inspect, when and as requested, any books and records or other documents or which prohibits any person from withdrawing, transferring, removing, dissipating, or disposing of any funds, assets, or other property, and other than an order appointing a temporary receiver to administer such restraining order and to perform such other duties as the court may consider appropriate) or injunction for violation of the provisions of this chapter shall be issued ex parte by said court.
(b) Injunction or restraining order
Upon a proper showing, a permanent or temporary injunction or restraining order shall be granted without bond.
(c) Writs or other orders
Upon application of the Commission, the district courts of the United States and the United States courts of any territory or other place subject to the jurisdiction of the United States shall also have jurisdiction to issue writs of mandamus, or orders affording like relief, commanding any person to comply with the provisions of this chapter or any rule, regulation, or order of the Commission thereunder, including the requirement that such person take such action as is necessary to remove the danger of violation of this chapter or any such rule, regulation, or order: Provided, That no such writ of mandamus, or order affording like relief, shall be issued ex parte.
(d) Civil penalties
(1) In general.— In any action brought under this section, the Commission may seek and the court shall have jurisdiction to impose, on a proper showing, on any person found in the action to have committed any violation—
(A) a civil penalty in the amount of not more than the greater of $100,000 or triple the monetary gain to the person for each violation;
Submitted: 7 months ago.
Category: Legal
Expert:  Maverick replied 7 months ago.

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Customer: replied 7 months ago.
waiting for answer now... thanks
Expert:  Maverick replied 7 months ago.

If you look at the words I highlighted for you below, you will see that the civil penalties are yet another alternative remedy that the commission may pursue for any violation of Chapter 1.

(a)Action to enjoin or restrain violations

Whenever it shall appear to the Commission that any registered entity or other person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule, regulation, or order thereunder, or is restraining trading in any commodity for future delivery or any swap, the Commission may bring an action in the proper district court of the United States or the proper United States court of any territory or other place subject to the jurisdiction of the United States, to enjoin such act or practice, or to enforce compliance with this chapter, or any rule, regulation or order thereunder, and said courts shall have jurisdiction to entertain such actions:

Provided

, That no restraining order (other than a restraining order which prohibits any person from destroying, altering or disposing of, or refusing to permit authorized representatives of the Commission to inspect, when and as requested, any books and records or other documents or which prohibits any person from withdrawing, transferring, removing, dissipating, or disposing of any funds, assets, or other property, and other than an order appointing a temporary receiver to administer such restraining order and to perform such other duties as the court may consider appropriate) or injunction for violation of the provisions of this chapter shall be issued ex parte by said court.

(b)Injunction or restraining order

Upon a proper showing, a permanent or temporary injunction or restraining order shall be granted without bond.

(c)Writs or other orders

Upon application of the Commission, the district courts of the United States and the United States courts of any territory or other place subject to the jurisdiction of the United States shall also have jurisdiction to issue writs of mandamus, or orders affording like relief, commanding any person to comply with the provisions of this chapter or any rule, regulation, or order of the Commission thereunder, including the requirement that such person take such action as is necessary to remove the danger of violation of this chapter or any such rule, regulation, or order:

Provided

, That no such writ of mandamus, or order affording like relief, shall be issued ex parte.

(d)Civil penalties(1)In general.—In any action brought under this section, the Commission may seek and the court shall have jurisdiction to impose, on a proper showing, on any person found in the action to have committed any violation—(A)

a civil penalty in the amount of not more than the greater of $100,000 or triple the monetary gain to the person for each violation; or

(B)

in any case of manipulation or attempted manipulation in violation of section 9, 15, 13b, or 13(a)(2) of this title, a civil penalty in the amount of not more than the greater of $1,000,000 or triple the monetary gain to the person for each violation.

(2)

If a person on whom such a penalty is imposed fails to pay the penalty within the time prescribed in the court’s order, the Commission may refer the matter to the Attorney General who shall recover the penalty by action in the appropriate United States district court.

(3)Equitable remedies.—In any action brought under this section, the Commission may seek, and the court may impose, on a proper showing, on any person found in the action to have committed any violation, equitable remedies including—

SO, you see based on the statutes use of the words like "also" "this section" and "this chapter" and also the manner in which the statute is organized, the intent of the framers is to make civil penalties available as an immediate option to the issuance of an injunction [which can be, but does not have to be, imposed even BEFORE a first violation occurs].

I know this is not what you wanted to hear; but I am assuming that you are paying for an honest and professional opinion.

Expert:  Maverick replied 7 months ago.

The other point that just occurred to me that may help you understand this better is that if the court simply enjoined you and then you violated that order, the court would not need a statute such as the one in (d) providing for civil penalties as the court can enforce that order independently through a contempt of court and assess fines and even jail time on its own inherent judicial power.

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