Leist v. Simplot

638 F.2d 283, 1980 U.S. App. LEXIS 15922

• Court: Court of Appeals for the Second Circuit
• Decided: July 8, 1980
• Docket: Nos. 402-404, Dockets 79-7402, 79-7464 and 79-7482
• Status: Published

Opinions

FRIENDLY, Circuit Judge:

Plaintiffs in three consolidated actions in the District Court for the Southern District of New York appeal from an order of Judge, now Chief Judge, MacMahon, 470 F.Supp. 1256 (1979), granting appellees’ motions for partial summary judgment. The court struck from the complaints all claims based on the Commodity Exchange Act, (CEA), 7 U.S.C. §§ 1-19, as amended in 1974, as distinguished from other claims under the antitrust laws. The actions were to recover damages allegedly suffered by the plaintiffs as a result of what Judge MacMahon characterized as

the much publicized default in May 1976 of Maine potato futures contracts, when the sellers of almost 1,000 contracts failed to deliver approximately 50,000,000 pounds of potatoes, resulting in the largest default in the history of commodities futures trading in this country. 470 F.Supp. at 1258 (footnote omitted).

The basis for the court’s order was that no private cause of action exists for breach of the CEA. Since this important issue has divided the district courts, including those within our circuit, we feel constrained to discuss it in some detail.¹ We think it desirable, as did the district court, to begin with an explanation of the nature of the commodity futures markets.

1. COMMODITY FUTURES MARKETS

A commodity futures contract is simply a bilateral executory agreement for the purchase and sale of a particular commodity. The seller of the contract commits himself to deliver the commodity at a fixed date in the future, while the buyer commits himself then to accept delivery and pay the agreed price. ¹ Bromberg & Lowenfels, Securities Fraud & Commodities Fraud § 4.6(421) (1979); H.R.Rep.No.93-975, 93d Cong., 2d Sess. 130 (1974), U.S.Code Cong. & Admin. News 1974, p. 5843. Every aspect of the futures contract is standardized except price. For example, the contract involved in this case, the May 1976 Maine potato futures contract, is for 50,000 pounds of Maine grown potatoes of a specified quality to be delivered at specified points in cars of the Bangor & Aroostook Railroad, between May 7 and May 25,1976. Since price is the only variable, negotiations can readily proceed and the agreed prices can be speedily disseminated to other traders. Standardization also makes the contracts fungible. Original sellers and buyers can therefore offset their positions by acquiring opposite contracts, either paying or gaining any price differential. H.R.Rep.No.93-975, supra, at 130.

The person who has sold a futures contract, i. e., someone committed to deliver the commodity in the future, is said to be in a “short” position. Conversely, someone committed to accept delivery is “long”. It is a rare case, however, in which actual delivery takes place pursuant to a futures contract.² Save in these rare instances, the short and the long must liquidate their positions prior to the close of trading in the particular futures contract. Although the means by which this is done is routinely referred to as futures trading, futures contracts are not “traded” in the normal sense of that word. Rather they are formed and discharged. Clark, Genealogy and Genetics of “Contract of Sale of a Commodity for Future Delivery” in the Commodity Exchange Act, 27 Emory L.J. 1175, 1176 (1978). A person seeking to liquidate his futures position must form an opposite contract for the same quantity, so that his obligations under the two contracts will offset each other. Thus, a short who does not intend to deliver the commodity must purchase an equal number of long contracts; a long must sell an equal number of short contracts. Money is made or lost in the price different between the original contract and the offsetting transaction. If the price of the future has declined, usually because of market information indicating a drop in the price of the commodity, the short will realize a profit; if the futures price has risen, the long will realize a profit. See Cargill, Inc. v. Hardin, 452 F.2d 1154, 1157 (8 Cir. 1971), cert. denied, 406 U.S. 932, 92 S.Ct. 1770, 32 L.Ed.2d 135 (1972). Futures trading is a zero-sum game. Since money is made from the change in futures contract prices, and every contract has a long and a short, every gain can be matched with a corresponding loss. See Melamed, The Mechanics of a Commodity Futures Exchange: A Critique of Automation of the Transaction Process, 6 Hofstra L.Rev. 149, 166 & n.39 (1977).

The mechanics of the commodity futures market, and the roles of the various participants, can be illustrated by tracing a typical transaction. An individual wishing to invest in the futures market approaches a “futures commission merchant” (FCM). FCM’s are defined in the Commodity Exchange Act as individuals or associations “engaged in soliciting or in accepting orders for the purchase or sale of any commodity for future delivery ... on . .. any contract market ...,”§ 2(a)(1), 7 U.S.C. § 2, and they are registered with the Commodity Futures Trading Commission (CFTC). The FCM will demand a “margin” payment from the customer, which is simply a security deposit designed to protect against adverse price movements. The amount of the margin is based upon the amount which the customer can lose in a day or two; when the margin is exhausted the FCM will call the customer for additional payment. The margin is generally only a small percentage of the value of the contract. See Melamed, supra, 6 Hofstra L.Rev. at 167 & n.41. FCM’s are paid a commission on their customer’s business.

The FCM relays its customer’s order to one of its “floor brokers” trading on the exchange. The broker stands on the outside of a “pit” or “ring” around which are gathered other persons trading in the same contract. Some of the traders are brokers acting on behalf of customers, while others trade on their own account. Contracts are made by “open outcry”. The broker with an order will indicate his position at the pit by shouting and gesticulating with standardized hand signals. Someone willing to enter the contract responds across the pit in similar fashion, and the deal is made. Observers on raised pulpits alongside the pit record the transaction and feed the information into a communications system, publicizing it to other traders who, in any event, had an opportunity to witness the transaction in the pit. The broker relays the particulars of the deal to the FCM, who informs the customer.

When two traders have reached an agreement on the floor of the exchange, the role of the clearinghouse comes into play. The clearinghouse, a key link in the futures trading system, operates as the seller to all buyers and the buyer from all sellers, thus facilitating the interchangeability of the contracts and the cancelling of positions. H.R.Rep.No.93-975, supra, at 149; S.Rep. No.93-1131, 93d Cong., 2d Sess. 17 (1974), U.S.Code Cong. & Admin.News 1974, p. 5843; Cargill, Inc. v. Hardin, supra, 452 F.2d at 1156. Not all FCM’s are clearinghouse members; those that are not must deal through one that is. The clearinghouse treats FCM’s as principals in trading transactions and demands margin payments from them. The clearinghouse requires FCM’s to “mark to the market” at the close of every trading day. Any net gain or loss which the FCM has sustained in the course of the day’s trading is computed and margin adjustments are made accordingly. Melamed, supra, 6 Hofstra L.Rev. at 167-68.

Generally speaking there are two classes of traders in commodity futures contracts, although, as some of the facts of the instant cases indicate, the distinctions between them are often quite blurred. A “hedger” is a trader with an interest in the cash market for the commodity, who deals in futures contracts as a means of transferring risks he faces in the cash market. See H.R.Rep.No.93-975, supra, at 131, 133, 162. See also the complicated definition of “bona fide hedging transactions and positions” promulgated by the CFTC, 17 C.F.R. § 1.3(z). The owner of a commodity can hedge against declining prices by entering into equivalent short futures contracts for the month when he expects to be able to sell, and a processor (e. g., a miller) can hedge against increasing prices by going long for the month when he will need the commodity. Losses caused by a decline in prices on the cash market in the former case or an advance in the latter will be offset by profits in the futures transactions. See generally H.R.Rep.No.93-975, supra, at 130-34; Cargill, Inc. v. Hardin, supra, 452 F.2d at 1157-58; Note, supra, 73 Yale L.J. at 171-73. The benefits of hedging extend beyond the immediate participants in the transactions. “Because hedging of price risks in a futures market enables a merchant to reduce the exposures he has in doing business, he is able to operate on a lower profit margin with consequent lower prices to the consumer.” H.R.Rep.No.93-975, supra, at 132-33; see also S.Rep.No.93-1131, supra, at 18; Valdez, Modernizing the Regulation of the Commodity Futures Markets, 13 Harv.J.Legis. 35, 40 (1975).

The system would not function, however, if only hedgers sold and purchased commodity futures contracts.³ While hedging performs an insurance function, it is actually quite different from insurance. The risks faced by those dealing in the “cash” market, the market for the actual commodity, are not spread among those similarly situated, as with insurance, but rather are shifted to others. Bianco, The Mechanics of Futures Trading: Speculation and Manipulation, 6 Hofstra L.Rev. 27, 32 (1977); Cargill, Inc. v. Hardin, supra, 452 F.2d at 1158. The speculative investor, with no underlying interest in the cash market, is essential to take on the risks which the hedgers want to shift. The critical role of the “speculator” was described at some length in the House Report on the 1974 amendments:

The principal role of the speculator in the markets is to take the risks that the hedger is unwilling to accept. The opportunity for profit makes the speculator willing to take those risks. The activity of speculators is essential to the operation of a futures market in that the composite bids and offers of large numbers of individuals tend to broaden a market, thus making possible the execution with minimum price disturbance of the larger trade hedging orders. By increasing the number of bids and offers available at any given price level, the speculator usually helps to minimize price fluctuations rather than to intensify them. Without the trading activity of the speculative fraternity, the liquidity, so badly needed in futures markets, simply would not exist. Trading volume would be restricted materially since, without a host of speculative orders in the trading ring, many larger trade orders at limit prices would simply go unfilled due to the floor broker’s inability to find an equally large but opposing hedge order at the same price to complete the match. H.R.Rep.No.93-975, supra, at 138.

As commentators have noted, “Congress itself has recognized that the investor-although he is commonly referred to as a speculator in this context-is what makes the commodity futures market work .... ” Bromberg & Lowenfels, supra, at § 4.6(462).

Indeed, there is no bright-line difference between hedgers and speculators. Hedgers frequently do not merely balance their cash market risks in the futures market but engage in some speculation as well, buying or selling more or less futures contracts based on price expectations. Note, Abuses in the Commodity Markets: The Need for Change in the Regulatory Structure, 63 Geo.L.J. 751, 768-70 (1975); Valdez, supra, 13 Harv. J.Legis. at 64-65. On the other hand, speculators can become involved in the cash market as the activities of the plaintiff Incomco will demonstrate.

II. THE ALLEGED FACTS AND THE PROCEEDINGS BELOW

The facts alleged in the three complaints here before us are broadly as follows:⁴

John Richard Simplot is an Idaho potato entrepreneur who controls J. R. Simplot and Co., Simplot Products Co., Inc., and Simplot Industries, Inc. These corporations are responsible for the processing of approximately 50% of all Idaho potato products processed and sold in the United States. Peter J. Taggares is a Washington potato entrepreneur. He and his company, P. J. Taggares Co., process approximately 30% of all the Washington potatoes processed and sold in this country. Simplot and Taggares are equal partners in the ownership of Simtag Farms, a large farm in the State of Washington for the growing and warehousing of potatoes. Together Simplot, Taggares, and the companies they control-are the largest purchasers of potatoes throughout the western potato region of Washington, Idaho and Oregon.

According to the complaints, Simplot, Taggares, and the companies controlled by them, together with numerous co-conspirators, embarked in the spring of 1976 on a conspiracy to depress the price of the May 1976 Maine potato futures contract traded on the floor of the New York Mercantile Exchange (the “short conspiracy”). As stated by one of the complaints, “[b]y virtue of their position in the potato processing field and the quantity of potatoes purchased by them, [the conspirators] would be in a position to control the prices paid for potatoes but for the existence of the Exchange and the activity ... in buying and selling potato futures contracts.” Simplot had encountered difficulties in the course of his customary negotiations with the Idaho Potato Growers Association (IPGA), because the IPGA believed that the price of potatoes, including Maine potatoes, would be much higher than what Simplot was offering. Futures prices supported this view. A report issued on April 13, 1976 by the United States Department of Agriculture indicated that total potato stocks were down 11%, and that Maine stocks totalled only 7.4 million cwt. compared with 13.0 million cwt. on hand the previous year. An earlier report issued in August 1975 estimated that national potato acreage would be down 8% from the previous year with an even greater drop in Maine. The effect of this latter report, and other generally available information, was to drive the price of the May 1976 Maine contract from $9.75 per cwt. to a record high of $19.15 per cwt. by October 3, 1975. The activities of the short conspirators were designed to counteract the impact of these reports and other market information and rumors tending to raise the price of Maine futures. A decline in the price of potato futures would suggest to those dealing in the cash market, such as the IPGA, that supplies of Maine potatoes would be greater than earlier anticipated, and that prices in spot transactions or negotiations for all potatoes should correspondingly recede.

The primary means by which the short conspirators sought to depress the futures price was the accumulation of a large net short position in the May contract. The conspirators allegedly agreed to sell a large number of contracts short and to refuse to liquidate these shorts at a price higher than that agreed among themselves and, if necessary, to default on the obligation to make delivery on all unliquidated contracts. Such short purchases would give the impression of the existence of a large supply of deliverable Maine potatoes and drive down the price of the contract.

Simplot made $1 million available to Simtag Farms, which Simtag used to open a credit balance on March 29, 1976, with Pressner Trading Corp., a member of the New York Mercantile Exchange (the Exchange or NYME), for the purpose of buying and maintaining short positions in the May contract. At the same time, Simplot, Taggares and their other companies also began to accumulate a large number of short contracts. The brokers through which the conspirators acquired their positions included Clayton Brokerage Co. of St. Louis, Inc. (Clayton), Heinold Commodities, Inc. (Heinold), and Thomson & McKinnon, Auchincloss, Kohlmeyer, Inc. (Thomson). These three brokerage firms were, like Pressner Trading, clearing members of the Exchange and appropriately registered with the CFTC. The firms allegedly knew, or should have known, that their customers neither intended to nor would be able to cover the large number of short positions the brokers acquired for them.

On May 4, 1976, Simplot and Taggares were warned by the CFTC that it was aware of their large short position and that price manipulation was a violation of the Commodity Exchange Act. The telegram concluded that although this “is not an allegation of price manipulation, if prices of the May 1976 potato future ... should become artificial during liquidation due to your action or inaction, we will consider whether you and your firm should be charged with price manipulation under the Commodity Exchange Act.” In the face of this warning, and the impending close of trading on May 7, the conspirators not only failed to take steps to liquidate their large short position but actually increased it, again with the help and support of the named brokerage firms. On the last day of trading they consolidated all the short positions they controlled in the hands of Pressner. Clayton, Thomson and Heinold knowingly acquiesced in this consolidation designed to concentrate the force of the manipulation.

In addition to the accumulation of a large net short position which they refused to liquidate at higher than an agreed price, the conspirators also allegedly manipulated the futures price by shipping large quantities of unsold Idaho potatoes to the Maine markets for immediate sale at the going price. The use of such so-called “roller cars”, railroad cars of potatoes shipped although there is no pre-determined buyer, tends to depress the market price, and thus affect futures prices.

Simplot and Taggares were not the only group manipulating the price of the May future. A second group of eastern conspirators thought they could beat the western producers at their own game. Harold Collins and Caspar Mayrsohn are Maine potato merchants and traders in Maine futures. MFX Commodities, Inc., with Donald Silver as its president, is a foreign corporation engaged in business as a FCM. This group learned of the conspiracy of Simplot and Taggares and conspired to squeeze them. Pursuant to this conspiracy (the “long conspiracy”), the “long” group purchased as many contracts as it could, and then at the same time maneuvered to tie up the cash potato market so that the shorts could not make delivery. The longs reasoned that if the shorts had no access to deliverable potatoes, the longs would be able to dictate the price the shorts would have to pay to liquidate their contracts. The main way in which the longs tied up the cash markets was by tying up all of the rail cars of the Bangor & Aroostook Railroad, which alone could deliver potatoes to satisfy May futures contracts. This was done by using the cars for phony export shipments and leaving them loaded or only partially unloaded when they reached appropriate destinations.

Neither the longs nor the shorts would give in to the other. The shorts refused to liquidate their position by buying offsetting long contracts at higher than the price agreed among them; the longs refused to come down to the unreasonably low price demanded by the shorts. At the end of trading on May 7, the short conspirators controlled 1893 open short positions. The long conspirators controlled 911 open long positions. There are usually only approximately 200 open contracts at the end of trading on the May potato future.

The plaintiffs were caught in the middle between these two competing conspiracies. Neil Leist is a duly licensed member of the Exchange engaged in the business of trading commodities and futures for his own account. Incomco, a partnership, is a duly licensed FCM. Philip Smith is Incomco’s managing partner. The class action plaintiffs are traders and dealers representing all persons “who held a net long position in Contracts and who liquidated their long position in said contract between April 13, 1976 and the close of trading on the Exchange on May 7, 1976.”

On the basis of the same sort of information which motivated Simplot and Taggares to conspire to depress the price of the contract, plaintiffs believed there was an investment opportunity on the long side of the contract. If there was going to be a shortage of deliverable Maine round whites, those committed to deliver potatoes at a set price might well find this price to be under what the potatoes were worth. The shorts would then have to sustain a loss, either by purchasing potatoes in the cash market for the higher price and delivering them for the lower futures contract price, or by purchasing an offsetting long position. The price of the long position should have gone up due to the shortage, so that the shorts would lose the differential in liquidating. The shorts’ loss would be the longs’ gain, and it is this gain which the plaintiffs sought to realize by their investment.

■ All the plaintiffs invested heavily on the long side of the May contract. In addition, Incomco developed a position in the cash market. It had accepted 1,500,000 pounds of Maine potatoes delivered to it pursuant to the March futures contract, and planned to sell these potatoes to those short the May contract who needed supplies to satisfy their delivery obligations. Anticipating a cash market shortage, Incomco expected to sell its potatoes at a handsome premium.

Because of the conspiracies, however, plaintiffs not only did not realize the gains they claim they would have had in an unmanipulated market but suffered losses. The short conspirators continued to accumulate short positions when they should have been trying to liquidate by purchasing long contracts from plaintiffs, and refused to liquidate above a set price. In the face of the unnaturally falling price, the plaintiffs were forced out of the market at a loss. Because the long conspirators had successfully tied up all the freight cars of the Bangor & Aroostook, Incomco was unable to deliver its warehoused potatoes to persons seeking delivery to fulfill short contracts. As the warm weather set in, the 1,500,000 pounds of potatoes became rotten, and Incomco’s total investment was lost.

The Exchange allegedly figured in this debacle almost from the start. In March, Richard Levine, president of the Exchange, told plaintiff Leist that the Exchange was investigating the large number of open positions in the May contract. On April 28, two members of the CFTC eastern region office, Howard Bodenhamer and Marshall Horn, met with Levine and Howard Gabler, vice-president of the Exchange, to express their concern over the problems developing with the May contract. Levine recognized the problem and expressed the view that Simplot might be trying to create difficulties in the contract. A second meeting took place two days later, at which Bodenhamer told Levine that the Commissioners felt that “the Exchange should take more action than less to bring about orderly liquidations of the maturing futures.”

Levine did not report these meetings with the CFTC to the Exchange’s Board of Governors until after the close of trading on the May contract. Although the Exchange knew, or should have known, of both the short and the long conspiracies, it took no action to prevent manipulation of the market. The Exchange failed to declare an emergency situation pursuant to its rules to facilitate orderly liquidation, and, once trading had closed, failed to take appropriate steps such as permitting delivery by truck or buying potatoes to cover the default of the shorts.

The complaint in Leist v. Simplot was filed in the District Court for the Southern District of New York on September 30, 1976. Count I, directed against the short conspirators and their brokers, charged that the activities of the group constituted violations of 7 U.S.C. §§ 1-13 and, more specifically, that the group used and employed manipulative devices and contrivances in violation of 7 U.S.C. § 13, which makes such action a felony, and of rules promulgated by the CFTC. In addition to naming the brokers as conspirators, Count I specifically alleged that they “failed and neglected to enter liquidating orders” for the short conspirators prior to the close of trading “even though they knew that such short positions could not be covered and that there would be a default if the accounts were not closed out”, permitted the short sales to be made and cooperated in making such short sales “although they knew or should have known that the sellers did not intend to and would be unable to cover such short positions.” Count II of the complaint charged various violations of the Sherman Antitrust Act, 15 U.S.C. §§ 1, 2, which are not subject to the present appeal. Count III was directed against the long conspirators, describing the facts outlined above and charging that such conduct violated 7 U.S.C. §§ 1-13. Count IV was directed against the Exchange and its officials. After repeating the earlier general allegations against the short conspirators, the complaint charged that these defendants “negligently failed to maintain an orderly market for trading in Maine Futures in violation of the duties imposed upon them under the provisions of the Act.” The Exchange was also charged with failing to report the various violations alleged by the plaintiffs, and with failing to direct the entry of liquidating orders for the account of members with net short positions prior to the close of trading even though the Exchange officials knew or should have known that the sellers would not and could not make delivery if the positions remained open.

The complaint in Incomco v. New York Mercantile Exchange was filed in the District Court for the Southern District of New York on June 16, 1976. This complaint was directed at the long conspirators and the Exchange, “acting separately and also in concert with” the long conspirators, for “blocking the availability of railroad cars, thereby creating an artificial and manipulative railroad car shortage” in violation of the Commodity Exchange Act, and against the Exchange for failing to follow its own regulations requiring it to buy in the cash market for the account of delinquent sellers so that outstanding obligations will be fulfilled. As in Leist v. Simplot, plaintiffs also included an antitrust charge.

The complaint in National Super Spuds v. New York Mercantile Exchange was filed in the District Court for the Southern District of New York on May 26, 1976. After consolidation with other actions and amendment, this class action complaint charged that the activities of the short sellers described above “violated the applicable provisions of the Commodity Act [and] acted as a manipulative force which artificially lowered the price of the Contract.” Count II charged the short sellers with exceeding position and trading limits set by the CFTC in 17 C.F.R. § 150.10. Count IV was directed against the brokers for the short sellers, charging them with violating Exchange Rule §§ 44.02⁵ by failing to have liquidating orders placed although they knew or should have known that their customers could not deliver potatoes, permitting their customers to exceed position and trading limits imposed by the Act, and failing to report these and other violations of the Act, regulations, and Exchange rules by their customers of which they knew or should have known. Count V generally charged that the brokers, “with knowledge of intent of short Sellers to deflate the price of the Contract acquiesced and/or participated in the acts of Short Sellers.” Count VI was directed at the Exchange, charging that it failed and neglected to report and concealed violations of the Act, regulations, and its own rules; failed and neglected to direct that liquidating orders be entered with respect to members which the Exchange knew or should have known would default; generally failed and neglected to perform its duties as a contract market; and failed and neglected to exercise due care to halt manipulative practices. The three actions, all claiming extensive compensatory and punitive damages, were consolidated.

After answers had been filed and extensive discovery had been had, one phase of which has occupied the attention of this court, see National Super Spuds v. New York Mercantile Exchange, 591 F.2d 174 (2 Cir. 1979), three brokers, Clayton, Heinold and Thomson, and the Exchange and Exchange officials moved in the different actions for judgment on the pleadings under Fed.R.Civ.P. 12(c) or, in the alternative, for partial summary judgment under Fed.R. Civ.P. 56(b). Since he believed that all the parties had submitted factual material outside the pleadings, the judge considered the motions under Rule 56(b), although in fact the dispositive reasons so far as concerned the claims under the Commodity Exchange Act, which were all that were raised by the Exchange, the Exchange officials and Thomson, seem to have been wholly ones of law which could have been raised as well when the complaints had been filed two years earlier. In a thoughtful opinion issued on May 29, 1979, 470 F.Supp. 1256, Judge MacMahon held that there was no private right of action for damages under the Commodity Exchange Act, and granted summary judgment in favor of the moving defendants on those counts seeking recovery under that Act.⁶ Partial final judgment was entered under Fed.R.Civ.P. 54(b) in favor of the moving defendants, and the plaintiffs took the instant appeal.

III. THE HISTORY OF CONGRESSIONAL REGULATION OF COMMODITY FUTURES TRADING

Although our immediate concern is with the Commodity Exchange Act (CEA) as it now stands, it will be useful at this point to review the long history of Congressional regulation of commodity futures trading.

The first effort at such regulation was the Future Trading Act, 42 Stat. 187 (1921). This established the basic pattern of all regulation to follow, concentrating trading on central exchanges subject to the supervision and control of the federal government. The 1921 act levied a tax on all grain futures contracts not traded on a designated contract market. The Secretary of Agriculture was authorized to designate a board of trade as a “contract market” when the board, inter alia, “provides for the prevention of manipulation of prices.” § 5(d), 42 Stat. 188. This provision has remained virtually unchanged to the present day, and is one of the provisions upon which plaintiffs seek to base a private right of action against the Exchange. The act also empowered a commission composed of the Secretary of Agriculture, Secretary of Commerce, and the Attorney General to suspend or revoke the designation of any board of trade failing to comply with the conditions of its designation, § 6(a), 42 Stat. 188, and to preclude any person violating the act or attempting to manipulate prices from trading on designated contract markets, § 6(b), 42 Stat. 189. Failure to pay the appropriate tax or keep required records made the violator guilty of a misdemeanor with a fine of up to $10,000 and/or imprisonment for up to one year. § 10, 42 Stat. 191.

The Future Trading Act was declared to be an unconstitutional exercise of the taxing power in Hill v. Wallace, 259 U.S. 44, 42 S.Ct. 453, 66 L.Ed. 822 (1922). It was redrafted immediately and enacted as the Grain Futures Act, 42 Stat. 998 (1922). The offending tax provision was deleted, and Congress, relying now on the commerce power, simply made it unlawful for any person to deal in futures contracts off a designated contract market, § 4, 42 Stat. 999-1000. The other operative provisions of the 1921 act were retained, with the aforementioned penalties now activated by violation of § 4 rather than the failure to pay a tax. A section on purposes was added, § 3, 42 Stat. 999. This section has been carried over virtually unchanged to the present day, see 7 U.S.C. § 5. The 1922 act was declared a constitutional exercise of the commerce power in Board of Trade v. Olsen, 262 U.S. 1, 43 S.Ct. 479, 67 L.Ed. 839 (1923). The 1921 and 1922 acts established the basic pattern of limiting trading to designated exchanges and regulating that trading by controlling designation of and access to the contract markets. The fine and imprisonment scheme for violations was also established.

Major additions, rather than revisions, were enacted by the Commodity Exchange Act, 49 Stat. 1491 (1936). Coverage was extended beyond grains to include commodities such as cotton, butter, and eggs. Section 4a was added, empowering the commission of the Secretary of Agriculture, Secretary of Commerce, and Attorney General to fix quantitative limits on speculative trading.2 ****⁷ Here the short conspirators, with the knowledge of the appellee FCM’s, are alleged to have violated limits promulgated pursuant to this section. 17 C.F.R. § 150.10. The 1936 revisions also added § 4b, 49 Stat. 1493, the antifraud provision, essentially in its present form.⁸ New section 4d required the registration of FCM’s and section 4e of floor brokers, while section 4g provided for the suspension or revocation of these registrations for violation of the Act or rules adopted thereunder. Section 5a added new duties of reporting for contract markets and some substantive obligations as well. Fines and imprisonment sanctions were extended to cover violations of the newly enacted provisions as well as old § 4, and were also applied to anyone attempting to manipulate or manipulating the price of any commodity. 49 Stat. 1501.

By 1936, then, the major provisions which assertedly form the bases of the implied right of action against the FCM’s, the trading limit, antifraud, and antimanipulation provisions, were already in place. One of the two additional provisions allegedly affording the basis for an action against the Exchange, § 5(d), had been law since 1921 and the other, § 5a(8), would be added in 1968.

The 1968 amendments, 82 Stat. 26, extended regulation to new commodities such as live cattle and pork bellies. The amendments added § 5a(8), as noted above, requiring a contract market to enforce all of its rules not disapproved by the Secretary of Agriculture.⁹ Corresponding § 8a(7) was added empowering the Secretary to disapprove rules which violate or will violate the act or regulations. The penalty provision was altered somewhat, making FCM embezzlement and price manipulation felonies instead of misdemeanors, with a maximum prison term of five years instead of one. 82 Stat. 33-34. Section 6b was added, granting the Secretary the power to issue cease and desist orders against a contract market not enforcing its rules or violating the act. 82 Stat. 31-32.

(C) 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 exchange 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

(D) 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.

In contrast to the limited scope of the 1968 amendments, the 1974 amendments, 88 Stat. 1389 (1974), constituted a complete overhaul of the Act. They broadened its coverage from the agricultural commodities with which it had historically been concerned to include “all other goods and articles ... and all services, rights, and interests in which contracts for future delivery are presently or in the future dealt in”, subject to certain exceptions designed primarily to exclude securities. Consistently with this expansion in coverage, enforcement was transferred from the Department of Agriculture to a newly constituted Commodity Futures Trading Commission (CFTC). However, the amendments did not substantially alter any of the provisions which assertedly form the bases of an implied right of action. The antifraud and trading limits sections were basically unchanged. Maximum fines were increased from $10,000 to $100,000 in the penalty section.¹⁰ Section 5(d), requiring a contract market as a condition of designation, to prevent manipulation and cornering, remained unchanged, and § 5a(8) was altered so that exchanges were required to enforce their rules approved by the CFTC rather than those rules not disapproved by the Secretary.

The 1974 amendments required contract markets to provide arbitration procedures for settlement of customer grievances and claims not exceeding $15,000, § 5a(ll). The CFTC was vested with power to compel exchanges to adopt additional rules, § 8a(7), and to bring actions to enjoin violations of the Act and compel compliance through writs of mandamus, § 6c. Finally, the reparations procedure in § 14 was established, of which more hereafter.

The history of congressional concern with commodity futures trading has thus been one of steady expansion in coverage and strengthening of regulation. In 1936, 1968, and 1974 new commodities came under the CEA. In each of these years the power of the regulatory authority were augmented, and penalties were either extended, increased, or both. The question of Congressional intent with respect to private sanctions under the Act must be considered against this background of increasingly strong regulation designed to insure the existence of fair and orderly markets.

IV. PRIVATE CAUSES OF ACTION UNDER THE COMMODITY EXCHANGE ACT PRIOR TO THE 1974 AMENDMENT

During the late 1940’s, the 1950’s, the 1960’s and the early 1970’s there was widespread, indeed almost general, recognition of implied causes of action for damages under many provisions of the Securities Exchange Act, including not only the anti-fraud provisions, §§ 10 and 15(c)(1), see Kardon v. National Gypsum Co., 69 F.Supp. 512, 513-14 (E.D.Pa.1946); Fischman v. Raytheon Mfg. Co., 188 F.2d 783, 787 (2 Cir. 1951) (Frank, J.); Fratt v. Robinson, 203 F.2d 627, 631-33 (9 Cir. 1953), but many others. These included the provision, § 6(a)(1), requiring securities exchanges to enforce compliance with the Act and any rule or regulation made thereunder, see Baird v. Franklin, 141 F.2d 238, 239, 240, 244-45 (2 Cir.), cert. denied, 323 U.S. 737, 65 S.Ct. 38, 89 L.Ed. 591 (1944),¹¹ and provisions governing the solicitation of proxies, see J. I. Case Co. v. Borak, 377 U.S. 426, 431-35, 84 S.Ct. 1555, 1559-61, 12 L.Ed.2d 423 (1964). The Baird case is of special importance since the claim was of failure of the New York Stock Exchange to perform its duties-a claim paralleling that asserted here against NYME. Writing in 1961, Professor Loss remarked with respect to violations of the antifraud provisions that with one exception “not a single judge has expressed himself to the contrary.” 3 Securities Regulation 1763-64. See also Bromberg & Lowenfels, supra, § 2.2 (462) (describing 1946-1974 as the “expansion era” in implied causes of action under the securities laws). When damage actions for violation of § 10(b) and Rule 10b-5 reached the Supreme Court, the existence of an implied cause of action was not deemed worthy of extended discussion. Superintendent of Insurance v. Bankers Life & Casualty Co., 404 U.S. 6, 92 S.Ct. 165, 30 L.Ed.2d 128 (1971); Affiliated Ute Citizens v. United States, 406 U.S. 128, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972).¹² Implied private causes of action under other statutes administered by the SEC were also widely recognized, see, e. g., Goldstein v. Groesbeck, 142 F.2d 422,426-27 (2 Cir.), cert. denied, 323 U.S. 737, 65 S.Ct. 36, 89 L.Ed. 590 (1944) (Public Utility Holding Company Act); Cogan v. Johnston, 162 F.Supp. 907 (S.D.N.Y.1958); Schwartz v. Bowman, 156 F.Supp. 361 (S.D.N.Y.1957), appeal dismissed but holding on this point approved, Schwartz v. Eaton, 264 F.2d 195, 197-98 & n.5 (2 Cir. 1959); Brown v. Bullock, 194 F.Supp. 207, 220-21 (S.D.N.Y.), aff’d, with appellant conceding this point, 294 F.2d 415, 418 (2 Cir. 1961) (Investment Company Act);¹³ see also Caplin v. Marine Midland Grace Trust Co., 439 F.2d 118, 123 n.5 (2 Cir. 1971) (dictum), aff’d, 406 U.S. 416, 426 n.17, 92 S.Ct. 1678, 1684 n.17, 32 L.Ed.2d 195 (1972) (Trust Indenture Act). These statutes contained a panoply of other remedies-enforcement by the SEC, suspension, civil fines, criminal penalties, and some express private actions-which, with the exception of the administrative reparations remedy against one type of violator, were every bit as or more extensive than those in the CEA, but arguments that such provisions negated an implied private cause of action were regularly and firmly rejected, see, e. g., Judge Clark’s much cited opinion in Baird v. Franklin, supra, 141 F.2d at 244-45; Goldstein v. Groesbeck, supra, 142 F.2d at 426-27; Fratt v. Robinson, supra, 203 F.2d at 632; Dann v. Studebaker-Packard Corp., 288 F.2d 201, 208-09 (6 Cir. 1961). The question here is not whether all these decisions were wrong in the light of Supreme Court opinions of the past four years, as the dissent necessarily implies, but whether the 1974 Congress was not justified in assuming they would be followed with respect to the CEA.

Neither the generality and near unanimity of such interpretations of statutes regulating unfair securities practices, for which the CEA was the analogue with respect to futures trading,¹⁴ nor similar decisions in other fields, e. g., Reitmeister v. Reitmeister, 162 F.2d 691 (2 Cir. 1947) (action for damages implied from statute making interception of telephone calls a crime) (L. Hand, J.); Fitzgerald v. Pan American World Airways, 229 F.2d 499 (2 Cir. 1956) (action for damages implied from anti-discrimination provision of Civil Aeronautics Act although express remedies were complaint to CAB and criminal sanctions), were at all novel. They rested on principles recognized in a line of Supreme Court decisions going back to Texas & Pacific R. Co. v. Rigsby, 241 U.S. 33, 36 S.Ct. 482, 60 L.Ed. 874 (1916). Rigsby sustained the right of a switchman to recover damages for violation of the Federal Safety Appliance Acts although the only express sanctions were penal. The Court there stated:

A disregard of the command of the statute is a wrongful act, and where it results in damage to one of the class for whose especial benefit the statute was enacted, the right to recover damages from the party in default is implied according to a doctrine of the common law expressed in 1 Com. Dig., tit. Action upon Statute (F), in these words: “So, in every case, where a statute enacts, or prohibits a thing for the benefit of a person, he shall have a remedy upon the same statute for the thing enacted for his advantage, or for the recompense of a wrong done to him contrary to the said law.” (Per Holt, C. J., Anon., 6 Mod. 26, 27.) 241 U.S. at 39, 36 S.Ct. at 484.

Following Rigsby the Supreme Court recognized implied causes of action on numerous occasions, see, e. g., Wyandotte Transportation Co. v. United States, 389 U.S. 191, 88 S.Ct. 379, 19 L.Ed.2d 407 (1967) (sustaining implied cause of action by United States for damages under Rivers and Harbors Act for removing negligently sunk vessel despite express remedies of in rem action and criminal penalties); United States v. Republic Steel Corp., 362 U.S. 482, 80 S.Ct. 884, 4 L.Ed.2d 903 (1960) (sustaining implied cause of action by United States for an injunction under the Rivers and Harbors Act); Tunstall v. Locomotive Firemen & Enginemen, 323 U.S. 210, 65 S.Ct. 235, 89 L.Ed. 187 (1944) (sustaining implied cause of action by union member against union for discrimination among members despite existence of Board of Mediation); Sullivan v. Little Hunting Park, Inc., 396 U.S. 229, 90 S.Ct. 400, 24 L.Ed.2d 336 (1969) (sustaining implied private cause of action under 42 U.S.C. § 1982); Allen v. State Board of Elections, 393 U.S. 544, 89 S.Ct. 817, 22 L.Ed.2d 1 (1969) (sustaining implied private cause of action under § 5 of the Voting Rights Act despite the existence of a complex regulatory scheme and explicit rights of action in the Attorney General); and, of course, the aforementioned decisions under the securities laws. As the Supreme Court itself has recognized, the period of the 1960’s and early 1970’s was one in which the “Court had consistently found implied remedies.” Cannon v. University of Chicago, 441 U.S. 677, 698, 99 S.Ct. 1946, 1958, 60 L.Ed.2d 560 (1979); id. at 718, 99 S.Ct. at 1968 (Rehnquist, J., concurring) (“Cases such as J. I. Case Co. v. Borak ... and numerous cases from other federal courts, gave Congress good reason to think that the federal judiciary would undertake this task”). See generally Note, Implying Civil Remedies from Federal Regulatory Statutes, 71 Harv.L.Rev. 285 (1963).

Given so many cases implying private rights of action under a broad range of statutes, both cognate (as in the instance of the securities legislation) and otherwise, supported by a goodly number of Supreme Court decisions and the reasoning behind them,¹⁵ it was scarcely surprising that the courts that considered the question prior to the 1974 amendments unanimously upheld the implication of a private cause of action under the CEA. Indeed in the climate then prevailing it would have been almost unthinkable for the lower courts to have held that administrative and penal remedies were adequate for the enforcement of private claims for economic loss caused by violation of this important effort by Congress to regulate the commodity futures markets. And they did not. The first reported case, frequently cited in later decisions, was Goodman v. H. Hentz & Co., 265 F.Supp. 440 (N.D.Ill.1967).¹⁶ The unbroken line of decisions upholding a private right of action under pre-1974 law includes cases from all of the major centers of activity in the commodity futures field. Anderson v. Francis I. duPont & Co., 291 F.Supp. 705, 710 (D.Minn.1968); Hecht v. Harris, Upham & Co., 283 F.Supp. 417, 437 (N.D.Cal.1968), modified, 430 F.2d 1202 (9 Cir. 1970); United Egg Producers v. Bauer International Corp., 311 F.Supp. 1375, 1384 (S.D.N.Y. 1970); Booth v. Peavey Company Commodity Services, 430 F.2d 132, 133 (8 Cir. 1970); McCurnin v. Kohlmeyer & Co., 340 F.Supp. 1338, 1343 (E.D.La.1972), aff’d, 477 F.2d 113 (5 Cir. 1973); Gould v. Barnes Brokerage Co., Inc., 345 F.Supp. 294, 295 (N.D.Tex. 1972); Johnson v. Arthur Epsey, Shearson, Hamill & Co., 341 F.Supp. 764, 766 (S.D.N. Y.1972); Arnold v. Bache & Co., 377 F.Supp. 61, 65 (M.D.Pa.1973); Deaktor v. L. D. Schreiber & Co., 479 F.2d 529, 534 (7 Cir.), rev’d on other grounds sub nom. Chicago Mercantile Exchange v. Deaktor, 414 U.S. 113, 94 S.Ct. 466, 38 L.Ed.2d 344 (1973) (per curiam); Seligson v. New York Produce Exchange, 378 F.Supp. 1076, 1084 (S.D.N.Y.1974), aff’d sub nom. Miller v. New York Produce Exchange, 550 F.2d 762 (2 Cir.), cert. denied, 434 U.S. 823, 98 S.Ct. 68, 54 L.Ed.2d 80 (1977).

It is true that most of these cases concerned fraud by a broker against his customers or churning of a customer’s account, which was clearly within § 4b of the Act, but none stressed the broker-customer relation as either the basis or the limit of liability. And several did not involve fraud practiced by a broker on his customers. The most important of these is Deaktor v. L. D. Schreiber & Co., 479 F.2d 529 (7 Cir.), rev’d on other grounds sub nom. Chicago Mercantile Exchange v. Deaktor, 414 U.S. 113, 94 S.Ct. 466, 38 L.Ed.2d 344 (1973). Two cases were before the court. Plaintiffs in the first case sued the Exchange and various members alleging that the defendants manipulated the futures market for frozen pork bellies, a violation of CEA § 9(b), 7 U.S.C. § 13(b), artificially raising the price and thereby injuring those who, like the Deaktor plaintiffs, had sold short and were forced to liquidate their positions at higher prices (the converse of the situation of the plaintiffs in our case). The Exchange was also charged with violating CEA § 5a(8), 7 U.S.C. § 7a(8), the provision requiring an exchange to “enforce all bylaws, rules, regulations, and resolutions”. Plaintiffs in the second case charged the Exchange with monopolizing trading in the fresh egg futures market, causing the price to fall and forcing plaintiffs to sell at artificially depressed prices. This conduct was alleged to violate the notice and hearing provisions in Rule 217(D) of the Exchange, CEA §§ 5a(8) and 9(b) (the criminal penalty provision for manipulation), 7 U.S.C. §§ 7a(8), 13(b), and the Sherman Act. The case reached the Seventh Circuit on denials of motions by the Exchange and other defendants to stay district court action pending the exercise of primary jurisdiction by the Commodity Exchange Commission. Having declined to defer to the primary jurisdiction of the Commission, the court reached the question whether private damage actions were allowable under the CEA. Citing numerous cases, the Deaktor court stated that “courts which have considered the question ... have apparently uniformly concluded that such an action exists.” Id. at 534. The court noted that the purpose of the Act was, in the language of the congressional reports, “to insure fair practice and honest dealing on the commodity exchanges and to provide a measure of control over those forms of speculative activity which too often demoralize the markets to the injury of producers and consumers and the exchanges themselves.” The court further noted that § 9(b) of the Act made it a felony to manipulate prices, and concluded that in light of this provision and the general purpose of the Act, “we think the enactment is at least in part intended to protect the interests of the plaintiffs-traders in these actions,” and therefore held that plaintiffs had a cause of action. Id. Thus, immediately before consideration of the 1974 amendments began, and only one year prior to their enactment by the Congress, the Court of Appeals with jurisdiction over the center where approximately 80% of all futures contracts were traded in the United States had clearly held that a private cause of action existed under the CEA-not simply for fraud by a broker on his customer but for manipulation as well. The notion, strongly emphasized by the dissent, that such a decision escaped the knowledge of those framing the amendments, seriously underrates the expertise of our lawmakers and their staffs in subjects of particular concern to them.

Far from undermining the Seventh Circuit’s recognition of an implied cause of action, the Supreme Court’s reversal, 414 U.S. 113, 94 S.Ct. 466, 38 L.Ed.2d 344 (1973) (per curiam), on the ground that the court should have deferred to the primary jurisdiction of the Commission implicitly affirmed this recognition. Noting that “ ‘Congress has established a specialized agency that would determine either that a .. . rule of the Exchange has been violated or that it has been followed ...’”, the Court emphasized that “ ‘Either judgment would require determination of facts and the interpretation and application of the Act and Exchange rules ...’” and that “ ‘either determination will be of great help to the ... court ....’” Id. at 115, 94 S.Ct. at 467, quoting Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 307, 93 S.Ct. 573, 583, 34 L.Ed.2d 525 (1973). Thus the Court’s reason for insisting on a determination by the Commission “in the first instance”, 414 U.S. at 116, 94 S.Ct. at 467, was that it would assist a court in hearing plaintiff’s claims “in the second instance”. The Court did not “decline to reach the issue” whether plaintiffs’ claims were cognizable in federal court, as the dissent asserts (p. 343); it simply assumed that they were, as the Seventh Circuit had held.

16a

Other cases upholding an implied cause of action outside the broker-customer relationship were United Egg Producers v. Bauer International Corp., supra, 311 F.Supp. 1375, which recognized an implied cause of action under § 9(b) on behalf of various egg producers against an import-export firm, and Seligson v. New York Produce Exchange, supra, 378 F.Supp. 1076. Seligson arose out of the much-publicized “Salad Oil Swindle”, and recognized an implied cause of action on behalf of the trustee in bankruptcy of a brokerage firm against the exchange, exchange officials, and the clearinghouse.¹⁷

While cases based on pre-1974 facts decided after the 1974 amendment, apparently under pre-1974 law, are of less pertinence since the 1974 Congress could not have known of the decisions,¹⁸ they deserve mention as indicative of the uncontradicted view of the law prevailing when Congress acted. In Case & Co., Inc. v. Board of Trade, 523 F.2d 355 (7 Cir. 1975) (Cummings, Stevens, and Tone, JJ.), plaintiff sued the Board and its governors for violating §§ 5a(l) and 5a(8) of the CEA in suspending trading limits on soybean futures. The court began its discussion of liability by stating that “[i]t is undisputed that a private cause of action may be maintained under the Commodity Exchange Act. See Deaktor .. Id. at 360. In Hirk v. Agri-Research Council, Inc., 561 F.2d 96, 103 n.8 (7 Cir. 1977), the same court flatly stated that “[private damage actions are allowable under the CEA. See, e. g., Deaktor ....’’ See also Bartley v. P. G. Commodities Associates, Inc., CCH Com.Fut.L.Rep. 120, 123 [1975-77 Transfer Binder] (S.D.N.Y.1975) (churning complaint under § 4b).

We see no need to burden this opinion with detailed examination of district court decisions concerning whether the 1974 amendments eliminated the private cause of action theretofore unanimously recognized. The courts have divided although the weight of authority is in favor of continued implication.¹⁹ As noted, the only court of appeals to have considered the issue has held that a private cause of action should be implied. Curran v. Merrill Lynch, note 1 supra.

V. THE CONTINUED EXISTENCE OF THE PRIVATE CAUSE OF ACTION

In deciding the issue here before us, we follow the analysis set forth in Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2087, 45 L.Ed.2d 26 (1975).²⁰

There is, however, one differentiating factor of such transcendent importance as to demand mention at the outset. As shown in Part. IV of this opinion the decisions prior to the 1974 amendments had uniformly upheld the existence of a private cause of action under the provisions of the Commodity Exchange Act, and as will be shown in this part, the 1974 Congress was well aware of the existing state of the law. Even without more, the question thus would not be whether Congress intended to create a new private right of action in 1974, but rather whether it intended sub silentio to alter the significance that had long been given these provisions by making other changes in the Act. Beyond this, however, we do not need to assume, as the Court stated would be “appropriate” in upholding a private cause of action in Cannon v. University of Chicago, 441 U.S. 677, 696-97, 99 S.Ct. 1946, 1957, 60 L.Ed.2d 560 (1979), “that our elected representatives, like other citizens, know the law” or to “presume” that they “were aware of the prior interpretation” of a related statute. See Lorillard v. Pons, 434 U.S. 575, 580, 98 S.Ct. 866, 869, 55 L.Ed.2d 40 (1978) (“Congress is presumed to be aware of an administrative or judicial interpretation of a statute”). Here the existence of an implied right of action under the Commodity Exchange Act as it stood in 1974 was repeatedly called to the attention of and implicitly approved by Congress. This alone sufficiently answers appellees’ claim that if the 1974 Congress wished to create a private cause of action, it would and should have said so and that it is implausible to suppose that “Congress absentmindedly forgot to mention an intended private action.” Cannon, supra, 441 U.S. at 742, 99 S.Ct. at 1981 (Powell, J., dissenting). Whether rightly or wrongly in light of recent Supreme Court jurisprudence, the courts had read a private cause of action into the statute, just as they had done with statutes of similar import in related fields, and Congress knew that they had done so. The burden thus lies on those who urge that the 1974 amendments demonstrate an intention to change prior law, or, paraphrasing the language from Mr. Justice Powell’s Cannon dissent, supra, that, in making the changes that it did, Congress “absentmindedly forgot” to repeal the private cause of action. The silence of the 1974 Congress with respect to private causes of action for violations of the CEA, on which the dissent leans so heavily, is no more significant than the similar silence of the 1975 Congress which extensively amended the Securities Exchange Act, 89 Stat. 97. When a principle has become settled through court decisions, there is no occasion for Congress to speak unless it wishes a change.²¹

1. Taking the first of the Cort factors, we have no difficulty in concluding, despite appellees’ claims to the contrary, that the plaintiffs were among “the class for whose especial benefit the statute was enacted,” a phrase going back to Texas & Pacific R. Co. v. Rigsby, supra, 241 U.S. at 39, 36 S.Ct. at 484. Although Congressional committees and sponsors of the ill-fated 1921 legislation devoted most of their eloquence to injuries suffered by producers at the hands of wicked speculators, the Senate Report on the 1922 Act recognized that:

Transactions in grain futures are utilized by the public for speculation and by the grain trade for the purpose of eliminating or reducing, as far as practicable, the hazards in the merchandising of grain and its products and by-products due to price fluctuations. Public speculation helps to carry the risk for the producers, dealers, and millers who wish to hedge their cash grain transactions. S.Rep. No. 871, 67th Cong., 2d Sess. 3 (1922).

It is true that much of the debate on the floor of the House consisted of vituperative attacks on those “gambling” in the grain trade to the detriment of the producers and the consumer. However, these attacks were generally directed at big speculators, i. e., those in a position to manipulate the market, and there was always the recognition that “legitimate trade” was acceptable and indeed beneficial.²² The emphasis on producers in § 3, the statement of purposes in the 1922 Act, was due to a desire to state a basis clearly within then existing notions of the commerce power rather than to risk invalidation by including classes whom the Supreme Court might not think to come within it; Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122 (1942), then lay twenty years in the future.²³ At that time, moreover, the importance of the speculator in the efficient functioning of the futures market had not yet been so fully recognized by Congress as it has now become.

It is plain in any event that by the time of the 1936 amendments, as was later to be stated in the House Report on the 1978 amendments, “the community protected under federal commodities law was expanded to include speculators.” H.R.Rep.No.95-1181, 95th Cong., 2d Sess. 84 (1978). As described in the 1935 House Report, “The fundamental purpose of the measure is to insure fair practice and honest dealing on the commodity exchanges and to provide a measure of control over those forms of speculative activity which too often demoralize the markets to the injury of producers and consumers and the exchanges themselves.” H.R.Rep.No.421, 74th Cong., 1st Sess. 1 (1935). “Fair practice and honest dealing” are, of course, beneficial not only to farmers but also to legitimate speculators using the market. The concern expressed in the last clause of the quotation, to avoid injury to “the exchanges themselves”, certainly encompassed protection for those using the exchanges. This was made clear in a later passage from the same report: “[The bill] simply provides for honesty in the conduct of what are important public markets. This affects vitally the interests of the people, whether they be producers or consumers of the commodities covered by the bill or whether they belong to that class of citizens who have a fondness, and perhaps some aptitude for speculative investment in commodities and who like to test their judgment concerning values and price trends by occasional and moderate speculation therein.” Id. at 2-3. While the debates in Congress, like those in 1922, did contain many attacks on speculative investors, again there was a recognition of the necessary role of speculators, and the focus of the attacks was on the big manipulator, whose activity was perceived to be detrimental not only to producers and consumers but also to those referred to as “legitimate” traders and dealers.²⁴ The clearest indication of Congress’ concern to regulate the large-scale market operator is, of course, the authorization of trading limits in § 4a.

The legislative history of the 1968 amendments continued the recognition of the critical role played by speculative investors and the attack on big or powerful manipulators rather than speculators in general. Both the House and Senate reports explicitly recognized that most futures trading was done by speculators. H.R.Rep.No.743, 90th Cong., 1st Sess. 2 (1967); S.Rep.No.947, 90th Cong., 2d Sess. (1968), reprinted in 2 U.S.Code Cong. & Admin.News, pp. 1673, 1675 (1968). The House Report noted that such speculative activity carried with it “the danger that on occasion powerful traders will attempt to influence prices,” H.R. Rep.No.743, supra, at 2, but also recognized the necessary role of the legitimate speculator: “This speculative activity provides a means of reducing price risks by persons handling the actual commodity and thus makes possible higher prices to producers and lower prices to consumers.” Id.

Finally, and most important, the concern to protect the speculator as well as the hedger was clearly evident in the enactment of the 1974 amendments. The House Report noted the large influx of speculators into the commodity futures market as one of the “specific situations mandating] a comprehensive rewrite of futures trading regulation”. H.R.Rep.No.93-975, supra, at 39. The beneficial, indeed indispensable, role of such speculators was recognized not only in the House Report, in the language quoted in Part I of this opinion, id. at 138, but also in the debate on the floor of the House. Introducing the bill, Chairman Poage of the Committee on Agriculture observed that speculators “provide a very real service to the market and its users, by providing liquidity.” 119 Cong.Rec. 41332 (Dec. 13, 1973). Representative Wampler, the ranking minority member of the House Committee and a supporter of the bill, stated that:

While the speculator has been much maligned to the point where critics of the present marketing system have tried to make “speculator” a dirty word, we must not forget that the speculator performs an important economic function in futures markets. He is, in effect, the risk bearer who assumes the risks which the hedger seeks to avoid. 120 Cong.Rec. 10739 (April 11, 1974).

The debates reveal that one problem prompting the amendments was the catastrophic losses suffered by futures traders, mostly “speculators”, who were dealing in commodities not regulated by the old act. See 119 Cong.Rec. 41332 (Dec. 13, 1973) (Remarks of Chairman Poage). In extending regulation to previously unregulated futures markets, the House Report specifically stated that “[t]here is no reason why a person trading in one of the currently unregulated futures markets should not receive the same protection afforded to those trading in the currently regulated markets.” H.R.Rep. No. 93-975, supra, at 76. In other words, the old act protected those trading in the markets-not merely producers or consumers of the commodity-and the new act would extend this protection of traders to new markets in which even fewer of the traders produced or consumed the actual commodity.

Senate consideration of the 1974 amendments reinforced the views evident in the House. The Senate Report opened with a quotation from Justice Holmes, Board of Trade v. Christie Grain & Stock Co., 198 U.S. 236, 247-48, 25 S.Ct. 637, 648-649, 49 L.Ed. 1031 (1905), recognizing the virtues of speculation:

People will endeavor to forecast the future and to make agreements according to their prophecy. Speculation of this kind by competent men is the self-adjustment of society to the probable. Its value is well known as a means of avoiding or mitigating catastrophes, equalizing prices and providing for periods of want. S.Rep.No.93-1131, supra, at iii.

Like the House Report, the Senate Report recognized the role of “the competitive effect of many speculative buyers and sellers in the market” in reducing merchandising price margins. Id. at 12, U.S.Code Cong. & Admin.News, 974 at 5854. The Senate changed the House bill to provide for an independent CFTC, rather than one under the USDA, since it was concerned that the USDA’s historic role as the spokesman for farm interests might affect its policing of commodity markets. See id. at 21 — 22. This clearly evinces a concern to protect those trading on the commodity futures markets, and not simply agricultural producers. Accord, 120 Cong.Rec. 30467 (Sept. 6, 1974) (Remarks of Sen. Taft). Senator Dole considered the purpose of the 1974 amendments to be “to protect any individual who desires to participate in futures market trading,” id. at 30466, and Chairman Talmadge of the Senate Committee on Agriculture and Forestry wrote that “all of the members of the committee who worked on this legislation had one goal in mind-to develop a strong, but fair regulatory scheme that will protect investors, businessmen and consumers.” 120 Cong.Rec. 34996 (Oct. 10, 1974) (emphasis supplied).

It is true, of course, that the CEA was enacted for the benefit of the entire public, as hopefully most regulatory legislation is. But, as is the case with respect to all such legislation, criminal as well as civil, some classes are more in need of protection than others. It is almost self-evident that legislation regulating future trading was for the “especial benefit” of futures traders.²⁵ Hence it is not surprising that the courts have thus been nearly unanimous in concluding that “speculators”, now long recognized to be legitimate investors, as well as hedgers, are within the class for whose especial benefit the CEA was enacted, see especially Smith v. Groover, 468 F.Supp. at 113; Gravois v. Fairchild, Arabatzis, et al., supra, CCH Com.Fut.L.Rep. 1120, 706. Indeed, even those courts finding no implied right of action under the Act as amended in 1974, including the district court in this case, 470 F.Supp. at 1259, have generally concluded that the first prong of the Cort test was satisfied. See, e. g., Berman v. Bache, Halsey, Stuart, Shields, Inc., supra 467 F.Supp. at 322 (“little question”); cf. Fischer v. Rosenthal & Co., supra (assuming arguendo that plaintiff met the first Cort test, “as indeed he may”). More importantly, this court itself is on record to that effect. In Ames v. Merrill Lynch, Pierce, Fenner & Smith, supra, 567 F.2d 1174, where we refused to grant a stay of plaintiff’s private damage action and compel arbitration, the parties having agreed that an implied cause of action existed under the Act, Judge Gurfein wrote that “[w]e have no doubt that the Act itself, enacted as it was for the protection of investors, prohibited a surrender of private remedies through an agreement to arbitrate which was not voluntary in the sense that the penalty for refusal was exclusion from the market.” Id. at 1179 (emphasis supplied).²⁶ See also Silverman v. CFTC, 562 F.2d 432, 438 (7 Cir. 1977) (“We must be mindful of a Congressional purpose, clearly evidenced at least since 1933, to protect the American investing and speculating public not only from fraud and fraudulent practices, but from those whose past actions indicate that they might be tempted to engage in such practices”) (quoting Moore, J., in Savage v. CFTC, 548 F.2d 192, 197 (7 Cir. 1977).²⁷

2. We turn now to the second and evidently the most important, see Touche Ross & Co. v. Redington, supra, 442 U.S. at 575, 99 S.Ct. at 2489, of the Cort factors, “is there any indication of legislative intent, explicit or implicit, either to create such a [private] remedy or to deny one?” 422 U.S. at 78, 95 S.Ct. at 2088. This inquiry requires an intensive examination of the legislative history of the 1974 amendments. We conduct this, of course, with full awareness of the cautions in Ernst & Ernst v. Hochfelder, 425 U.S. 185, 204 n.24, 96 S.Ct. 1375, 1386 n.24, 47 L.Ed.2d 668 (1976) and Piper v. Chris-Craft Industries, Inc., 430 U.S. 1, 31-32, 97 S.Ct. 926, 944, 51 L.Ed.2d 124 (1977), against the dangers of undue reliance on “passing references” by others than the Congressional committees or sponsors or on general statements not directly relevant to the issue at hand.

In our view the legislative history amply demonstrates the 1974 Congress’ awareness of the uniform judicial recognition of private rights of action under the Commodity Exchange Act and a desire to preserve them. We are not, as the dissent suggests, “presuming” that Congress was aware of these decisions; the evidence of its awareness is overwhelming.

We begin with the House Report. This noted that when exchange self-regulation first developed, “[V]ery little thought was probably given to whether the failure to meet [stated] ideals would expose the exchanges to legal liability . ... ” H.R.Rep. No.93-975, supra, at 45. The report stated that this view began to change early in the 1920’s. “Perhaps the adoption of federal regulatory legislation spurred this total reorientation of the relationship between exchanges and the public. Slowly, the courts began to look upon exchange regulation as a guarantee to the public that its members would not violate its code of conduct.” Id. In 1968, the report continued, amendments to the CEA required exchanges to enforce their rules, § 5a(8). The existence of private rights of action was thought to have had a perverse effect on the effectiveness of this legislation which the report explicitly noted:

In the few years this provision has been in the present Commodity Exchange Act, there is growing evidence to indicate that, as opposed to strengthening the self-regulatory concept in present law, such a provision, coupled with only limited federal authority to require the exchanges to make and issue rules appropriate to enforcement of the Act-may have actually have worked to weaken it. With inadequate enforcement personnel the Committee was informed that attorneys to several boards of trade have been advising the boards to reduce -not expand exchange regulations designed to insure fair trading, since there is a growing body of opinion that failure to enforce the exchange rules is a violation of the Act which will support suits by private litigants, (emphasis in original).

Later in the Report the Committee noted that one of the specific problems “brought to [its] attention” was the:

Growing difficulties facing exchanges in self-regulatory actions as a result of private plaintiffs seeking damages against the markets. As examples, exchanges are sued for actions taken in emergency situations even when the action has been taken at the request (or order) of the CEA. Id. at 48 (emphasis supplied).

Nothing in the report, however, indicated dissatisfaction with the private right of action; the objective was to deal with the attendant reduction in exchange rulemaking. This was to be accomplished by empowering the CFTC to require exchanges to adopt rules, § 8a(7).²⁸

The existence of an implied private right of action was also clearly revealed to Congress in the debate on what became the 1974 amendments. Introducing the bill, Chairman Poage used the language quoted above, which eventually appeared in the House Report, about the change in the legal posture of exchange self-regulation. He then remarked that “when the Commodity Exchange Act was enacted, courts implied a private remedy for individual litigants in the Commodity Exchange Act.” 119 Cong. Rec. 41333 (Dec. 13, 1973).28a He went on to note, as would the House report, that as “the judgment of the board of directors of many of the exchanges in implementing decisions under self-regulatory functions is becoming increasingly a justiciable issue,” attorneys were advising exchanges to prune out rules they might not be able to enforce in order to avoid the threat of liability in private actions. This threat was described as providing the exchanges with a “solid reason” for retrenching on self-regulatory efforts. Id. At the outset of consideration by the whole House, then, the legislators were informed by the Chairman of the Committee considering the bill that private rights of action were implied under the Act.²⁹ This was not a mere passing reference, but a critical statement of fact that was a necessary step in explaining why new legislation was needed. The 1974 amendments signaled a dramatic shift from the theory of exchange self-regulation to authorization of the CFTC to compel the exchanges to alter or adopt rules, § 8a(7), and the proponents of the amendments were at pains to explain the need for such a shift. This explanation centered on the existence of an implied private right of action. Amendments were required to force exchanges to adopt beneficial rules because the threat of the judicially implied private right of action had led them to shirk this responsibility. Congress could not have understood why it was changing the underlying theory from exchange self-regulation to compulsory regulation without recognizing that the private rights of action that had been judicially implied under the Act demanded this change. It opted to cure the problem that had developed not by abolishing the private right of action but by empowering the CFTC to require the exchanges to adopt appropriate rules. No amount of labored parsing can obscure the self-evident truth that Congress knew the courts were implying private rights of action and did nothing to alter this. It matters little whether this be called recognition or approval.

The House hearings are replete with references to the maintenance of private causes of action under the Act. A representative of various New York commodity exchanges informed the House Committee on Agriculture that the Chicago Board of Trade was at that very moment the target of a $200 million class action,³⁰ and urged Congress to “take steps to insure that federally regulated exchanges are not exposed to this sort of astronomical civil liability suits ... ”, Hearings on Review of Commodity Exchange Act and Discussion of Possible Changes Before the House Committee on Agriculture, 93d Cong., 1st Sess. 121 (1973), something which Congress did not do. Another exchange representative and FCM, discussing the arbitration procedures to be required of contract markets, told the House Committee that “In addition to these arbitration procedures, complainants of course have access to the courts.” Hearings on H.R. 11955 Before the House Committee on Agriculture, 93d Cong., 2d Sess. 249 (1974) (emphasis supplied). A letter sent in the course of the just-cited hearings from Continental Grain Co. indicates that the cases cited in Part IV of this opinion may well have been only the tip of the iceberg-the cases where the private cause of action was challenged and was sustained in a published opinion. The letter calls to the committee’s attention “one recent class action settlement proceeding in court” which required the mailing of 339,-000 legal notices and resulted in legal fee claims of over $2,250,000. Id. at 321. The letter advocated requiring complainants to choose between arbitration or settlement procedures and resort to courts “which have already held they have jurisdiction over private complaints based on violations of the present law.” Id.

The existence of a private right of action also was repeatedly indicated during the Senate hearings on the four bills to amend the CEA. Hearings on S. 2485, S. 2578, S. 2837, and H.R. 13113 Before the Senate Committee on Agriculture and Forestry, 93d Cong., 2d Sess. (1974). Senator Clark and a commodities law expert, Professor Schotland of Georgetown University, expressed the view that private actions were available under the Act, id. at 205, 737, 746. A representative of the Minneapolis Grain Exchange objected to the settlement procedure contemplated for contract markets because the claims which exchanges would be required to adjudicate were not limited by any dollar amount and wished these to be confined to cases where the smallness of the claim entailed an “economic impediment to Court litigation.” Id. at 415. Such a limit appeared in the bill as enacted, § 5a(ll)(ii). The President of the Kansas City Board of Trade urged the Senators to protect exchanges “from unnecessary and costly defenses of lawsuits” brought under the Act. Id. at 317. He had made the same request before the House, with similar lack of success. Hearings on H.R. 11955, supra, at 123.³¹ We shall have more to say about Congress’ awareness of the private cause of action and its desire to preserve it when we come to discuss the provision preserving the jurisdiction of the courts. However, what we have developed up to this point is alone sufficient to invoke “the well-recognized canon of construction that the reenactment of a statute incorporates preceding judicial interpretations”, Van Vranken v. Helvering, 115 F.2d 709, 710 (2 Cir. 1940) (L. Hand, J.), cert. denied, 313 U.S. 585, 61 S.Ct. 1095, 85 L.Ed. 1540 (1941)-a canon which, as shown by the Van Vranken case, is not limited to interpretations by the Supreme Court. See Electric Storage Battery Co. v. Shimadzu, 307 U.S. 5, 14, 59 S.Ct. 675, 684, 83 L.Ed. 1071 (1930); Lorillard v. Pons, 434 U.S. 575, 580-81, 98 S.Ct. 866, 871, 55 L.Ed.2d 40 (1978); Bennett v. Panama Canal Co., 475 F.2d 1280, 1282 (D.C.Cir.1973) (Wyzanski, J.) (“the almost irrebuttable presumption which followed from reenactment with knowledge [of the Fifth Circuit’s interpretation of “may” as permissive]”). This canon applies with particular force to the instant case, where the 1974 amendments constituted “the first complete overhaul of the Commodity Exchange Act since its inception,” H.R.Rep. No. 93-975, supra, at 1, the relevant substantive provisions were left unchanged, and Congress had been made acutely aware of the prior judicial construction that these provisions gave rise to a private cause of action.³²

The Supreme Court has applied this principle on numerous occasions. In Lorillard v. Pons, 434 U.S. 575, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978), Justice Marshall, writing for a unanimous Court, said that when Congress has passed a new statute incorporating sections of a previously construed statute, “Congress is presumed to be aware of an administrative or judicial interpretation of a statute and to adopt that interpretation when it reenacts a statute without change”-even though, as indicated above, the interpretations were by lower federal courts and not by the Supreme Court. It was considered significant that the judicial construction of the previous statute had been unanimous, id. at 580-81, 98 S.Ct. at 869-70, as was the judicial implication of private rights of action prior to 1974 in our case. In Georgia v. United States, 411 U.S. 526, 532-33, 93 S.Ct. 1702, 1706-07, 36 L.Ed.2d 472 (1973), the Court was confronted with a question concerning interpretation of the Voting Rights Act, enacted in 1965 and extended after “extensive deliberations” in 1970, with changes and additions in areas other than the section before the Court. The Court had reached a decision on a related question in the 1969 case of Allen v. State Board of Elections, 393 U.S. 544, 89 S.Ct. 817, 22 L.Ed.2d 1 (1969). Justice Stewart reasoned that “[h]ad Congress disagreed with the interpretation of § 5 in Allen, it had ample opportunity to amend the statute. After extensive deliberations in 1970 on bills to extend the Voting Rights Act, during which the Allen case was repeatedly discussed, the Act was extended for five years, without any substantive modification of § 5.” 411 U.S. at 533, 93 S.Ct. at 1707. A footnote to this quotation indicated that the “repeated discussions” were in Congressional hearings. Id. n.5. While we have here no Supreme Court decision of the stature of Allen construing the CEA, since the Court’s opinion in Deaktor, 414 U.S. 113, 94 S.Ct. 466, 38 L.Ed.2d 344, was not an express holding of the existence of a private cause of action under the CEA, all the pre-1974 CEA cases, including the Seventh Circuit’s decision under review in Deaktor, reached the same result in favor of implication, and decisions sustaining private rights of action were called to the attention of Congress not only in Congressional hearings as in Georgia v. United States but in the House report and in floor debates.

The presumption just referred to is, of course, rebuttable and appellees insist it has been rebutted by changes made in the CEA in 1974. Before taking these up in detail, we note certain circumstances in addition to those already discussed that require an exceedingly strong showing of an intention to abolish the private cause of action for fraud, manipulation and violations by exchanges that had been universally recognized in order to justify a conclusion that this was Congress’ intent. The 1974 Congress repeatedly expressed its view that the changes were designed to strengthen commodity futures regulation, a goal that would be ill-served by abolishing the private right of action that everyone had thought to exist. The bill that became the 1974 amendments was described on its face as “an act to amend the Commodity Exchange Act to strengthen the regulation of futures trading .... ” H.R. 13113, 93d Cong., 2d Sess. 1 (1974) (emphasis supplied). The original hearings in the House on the bill were called by the Committee on Agriculture “with a view toward strengthening and revising the existing law.” H.R.Rep. No. 93-975, supra, at 53-54. The remarks on the floor of the House by the Committee chairman and the ranking minority member repeated this theme. See 120 Cong.Rec. 10736 (April 11, 1974) (Remarks of Rep. Poage) (“to strengthen the regulation of futures trading); id. at 10739 (Remarks of Rep. Wampler) (“to inform and strengthen the laws”). The goal in the Senate was the same. See, e. g., S.Rep.No.93-1131, supra at 18 (section entitled “Need for Better and Extended Regulation”). See also Curran v. Merrill Lynch, supra, note 1, 622 F.2d at 232 (“the legislative history of the CFTC Act . . . indicates that Congress intended to extend further protection to the exchange customer, rather than to extinguish existing forms of protection”). Yet the appellees would have us take the forbidden course of ascribing to Congress an intent with respect to private sanctions completely at odds with this clear legislative purpose. See National Petroleum Refiners Association v. Federal Trade Commission, 482 F.2d 672, 690 (D.C. Cir.1973), cert. denied, 415 U.S. 951, 94 S.Ct. 1475, 39 L.Ed.2d 567 (1974) (Wright, J.) (“where a statute is said to be susceptible of more than one meaning, we must not only consult its language; we must also relate the interpretation we provide to the felt and openly articulated concerns motivating the law’s framers”), and generally Cox, Judge Learned Hand and the Interpretation of Statutes, 60 Harv.L.Rev. 370 (1947).

In support of this endeavor to rebut the presumption that the 1974 Congress approved the previous interpretation of the CEA, the appellees point to the new reparations procedure of § 14. This authorizes any person complaining of any violation of the Act or any rule, regulation or order by any person registered or required to be so,³³ to apply to the CFTC. If the Commission thinks there are reasonable grounds for investigating the complaint, it shall do so. The Commission may, if in its opinion the facts warrant such action, serve the respondent, who is entitled to a hearing before an Administrative Law Judge except where the amount claimed does not exceed $5,000 in which event the Commission may proceed on the basis of depositions or verified statements of fact. A reparations order is enforceable by suit in a district court. However, this is subject to a right of the respondent to seek a prompt review of the reparations order in a court of appeals.

Quite apart from the provision explicitly preserving judicial remedies which we shall discuss later, the argument that Congress intended this to be the sole private remedy under the CEA is totally unconvincing for several reasons. The first and perhaps the most important reason is the limited scope of the reparations remedy. It is available only against persons who have or should have registered. On appellees’ argument, the exchanges which, to the clear knowledge of Congress, had been held subject to private suits before the 1974 amendments, would be wholly relieved of private liability, although Congress failed to heed their repeated pleas for explicitly granting such relief.³⁴ So too would large unregistered operators, alleged to have committed the most flagrant kind of manipulation, like Simplot and Taggares in the instant case-the very type of persons whose activities had been the subject of particular Congressional concern from the outset. We find it unimaginable that after a half century’s devotion to the regulation of futures trading, thirty years of exposure to the liberal implication of private causes of action under the related subject of securities regulation, and knowledge that the courts had consistently applied the same principle to the CEA, the 1974 Congress could have meant that the only federal remedies for persons claiming to have been wronged by such defendants to the extent of millions of dollars should be the small solace of having the Government collect civil fines and enforce administrative or criminal penalties. The dissent cannot paper over this gaping hole by saying, fn. 3, that such operators are not before us. They are defendants, probably the principal defendants, in these actions. While they have understandably chosen to stay in the background in the present argument, acceptance of the dissent’s position would compel the district court to dismiss the CEA claims against them. Even with respect to registered persons, the one class of defendants to whom the reparations procedure applies, the remedy hinges upon the Commission’s preliminary determination, apparently unreviewable, that the complainant has a prima facie case, and there is no assurance that this will afford the procedural benefits available in a civil trial. The case differs fundamentally from instances such as National Railroad Passenger Corp. v. National Ass’n of Railroad Passengers (Amtrak), 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974), and Touche Ross & Co. v. Redington, supra, 442 U.S. 560, 99 S.Ct. 2479, 61 L.Ed.2d 82, where Congress, operating on a tabula rasa, provided a new duty and certain express remedies to enforce that duty, and the Court applied the maxim expressio unius est ex-clusio alterius. When as here Congress adds a new remedy to enforce a preexisting duty, where other remedies had been clearly recognized, it would be expected to say so if it meant the new remedy to be exclusive. In fact, as will be seen, it said the opposite. It is just as much “judicial legislation” for a court to withdraw a remedy which Congress expected to be continued as to improvise one that Congress never had in mind.

These conclusions are strengthened by the legislative history of the reparations procedure. Chairman Poage, in an apparent reference to the reparations provisions, noted in the House that the Act “sets up new customer protection features.” 120 Cong.Rec. 10737 (April 11, 1974). This language suggests that the “new” features are in addition to the “old” ones, and certainly not that they are exclusive. In the Senate, Chairman Talmadge remarked:

The vesting in the Commission of the authority to have administrative law judges and apply a broad spectrum of civil and criminal penalties is likewise not intended to interfere with the courts in any way. It is hoped that giving the commission this authority will somewhat lighten the burden upon the courts, but the entire appeal process and the right of final determination by the courts are expressly preserved. 120 Cong.Rec. 30459 (Sept. 9, 1974).

The first sentence strongly suggests that Congress did not intend to repeal private rights of action by enacting the reparations procedure, and the second sentence is not to the contrary. If the reparations procedure was intended to be exclusive, then it certainly would lighten the burden on the courts, even with review of reparations orders by the courts of appeals. But the Senator spoke in terms of “hope” and lightening the burden “somewhat”-as if reparations were an alternative he hoped had been made attractive enough to sway some aggrieved traders away from the courts. The second clause relating to judicial review simply noted that even for those who elected reparations there could still be court involvement. Again the House Report describes the reparations procedures as “intended as a separate remedy designed to supplement the informal ‘settlement’ procedures contemplated of the contract markets and registered futures associations which are required under other sections of the legislation .... ” H.R.Rep.No.93-975, supra, at 22. These last two types of settlement procedures, however, are expressly made voluntary by the Act. See §§ 5a(ll), 17(b)(10). It can therefore be inferred that the reparations remedy is of the same character, and that the aggrieved trader is in no sense compelled to resort to reparations to obtain relief. Commentators have relied on this reasoning, and the savings clause in § 2(a)(1), in concluding that “the victim of a CEA violation is free to ignore the reparations procedure and file a lawsuit.” Bromberg & Lowenfels, supra, § 461 at 82.362 (1979). The CFTC is of the same view. See 41 F.R. 3994 (Jan. 27, 1976); id. at 18472 n.5 (May 4, 1976).³⁵

The argument that the reparations procedure was intended to be the exclusive private remedy is further negated and the case for the continuance of the private cause of action is enhanced by the jurisdictional savings clause, § 2(a)(1).³⁶

As passed by the House, the exclusive jurisdiction provision read as follows:

Provided, that the Commission shall have exclusive jurisdiction of transactions dealing in, resulting in, or relating to future delivery ... And provided further, that nothing herein contained shall supersede or limit the jurisdiction at any time conferred on the Securities Exchange Commission or other regulatory authorities under the laws of the United States ....

The purpose of this was to separate the functions of the new CFTC from those of the SEC and other regulators. As explained in the House Report, “All commodities trading in futures will be brought within federal regulation under the aegis of the new Commission, however, provision is made for preservation of Securities Exchange Commission jurisdiction in those areas traditionally regulated by it.” H.R.Rep. No.93-975, supra, at 3. See generally Johnson, The Commodity Futures Trading Commission Act: Preemption as Public Policy, 29 Vand.L.Rev. 1 (1976); Russo & Lyon, The Exclusive Jurisdiction of the Commodity Futures Trading Commission, 6 Hofstra L.Rev. 57 (1977). The provision was not intended to limit the jurisdiction of the courts. See Jones v. B. C. Christopher & Co., supra, 466 F.Supp. at 218-19.

However, these was fear that it would do so and numerous objections were raised to the House provision in the Senate hearings. Admittedly some of these were not primarily concerned with the question of court jurisdiction to hear claims in private actions under the CEA. Chairman Rodino of the House Committee on the Judiciary was concerned that the House provision might be read as pre-empting state courts of their jurisdiction to enforce futures contracts under general commercial law and “to oust even federal courts of jurisdiction”. Testifying before the Senate Committee, he suggested an amendment “to define the jurisdiction, including antitrust jurisdiction, of federal courts for commodity transactions.” Hearings on S. 2485, S. 2578, S. 2837 and H.R. 13113 Before the Senate Committee on Agriculture and Forestry, supra, at 259-60. While Chairman Rodino’s remarks were focused on antitrust jurisdiction, they were not limited to that. He argued generally that federal courts retained jurisdiction, and cited antitrust jurisdiction as an exam-pie supporting this view. Other objections to the exclusive jurisdiction provision of the House bill were explicitly addressed to the preservation of private rights of action.³⁷ Senator Clark noted that treble damages actions, provided in bills which he and Senator McGovern had introduced, were often the most effective enforcement tools.³⁸ “Unfortunately, the House bill not only does not authorize them but section 201 of that bill may prohibit all court actions. The staff of the House Agriculture Committee has said that this was done inadvertently and they hope it can be corrected in the Senate.” Id. at 205. Professor Schotland did not refer directly to the exclusive jurisdiction provision, but urged rather that the reparations provision, if retained at all, should be accompanied by “explicit language in the statute that Federal and State courts are still open if a complainant prefers to go to trial there.” Id. at 737, 747.

The upshot of these various objections was the addition by the Senate of the “savings clause”, now in § 2(a)(1):

nothing in this section shall supersede or limit the jurisdiction conferred on courts of the United States or of any State S.Rep. No. 93-1131, supra, at 54, U.S. Code Cong. & Admin.News, 974 at 5870.

The purpose of this change was stated to be to “make clear that .. . Federal and State courts retain their jurisdiction.” Id. at 6, U.S.Code Cong. & Admin.News, 974 at 5848. The Conference accepted the Senate amendment, with the same stated purpose. S.Rep.No.93-1194, 93d Cong., 2d Sess. 35 (1974); H.R.Rep.No.93-1383, 93d Cong., 2d Sess. 35 (1974). The respective chairmen of the House and Senate committees reported that “the conferees wished to make clear that nothing in the act would supersede or limit the jurisdiction presently conferred on courts of the United States or any State. This act is remedial legislation designed to correct certain abuses which Congress found to exist in areas that will now come within the jurisdiction of the CFTC.” 120 Cong.Ree. 34997 (Oct. 10, 1974) (Senator Talmadge); 120 Cong.Ree. 34737 (Oct. 9, 1974) (Representative Poage). When we couple this with Congress’ recognition that jurisdiction over private causes of action have been held to have been conferred, the conclusion that Congress desired their continued recognition is nigh irresistible.

Appellees’ primary answer to the foregoing discussion is that the pre-1974 cases upholding a private cause of action under the CEA were wrongly decided under the new trend in Supreme Court jurisprudence with respect to implication and that, in consequence, if Congress desired to preserve such a cause of action the savings clause was insufficient and nothing short of express statement would do. This argument might be somewhat impressive if we were dealing with legislation passed by Congress today. But the law here before us was enacted on October 23, 1974 and “the relevant inquiry is not whether Congress correctly perceived the then state of the law, but rather what its perception of the law was.” Brown v. G.S.A., 425 U.S. 820, 828-29, 96 S.Ct. 1961, 48 L.Ed.2d 402 (1976), quoted with approval by the majority in Cannon v. University of Chicago, supra, 441 U.S. at 710-11, 99 S.Ct. at 1964. Here not only did the 1974 Congress perceive the state of the law as allowing implied causes of action under the CEA but its perception was correct. As already developed, the related area of securities regulation was dominated by J.I. Case Co. v. Borak, supra, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423, which was cited with approval, subsequent to the 1974 amendments, in Cort v. Ash, supra, 422 U.S. at 78, 95 S.Ct. at 2087, and was distinguished but in no way disapproved in SIPC v. Barbour, 421 U.S. 412, 423-24, 95 S.Ct. 1733, 1740, 44 L.Ed.2d 263 (1975). While we of course follow the most recent pronouncements of the Supreme Court, those pronouncements focus our attention on the question of legislative intent, and “our evaluation of congressional action ... must take into account its contemporary legal context.” Cannon, supra, 441 U.S. at 698-99, 99 S.Ct. at 1958.

The sole decision preceding enactment of the 1974 amendments to which appellees point as evidencing the new trend is the Amtrak case, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646, decided on January 9, 1974. Apart from the fact that Amtrak was decided when the amendments were well on the road to enactment and there is no evidence that those concerned with the amendments were aware of it, the decision would not in any event have been a warning flag to Congress to make its approval of a private right of action explicit. The clear language of the Amtrak Act and its legislative history manifested an intent to allow suit only by the Attorney General and affected employees, and not by others such as the plaintiff, a passenger association. The Secretary of Transportation had voiced this interpretation during the hearings and, as Justice Stewart reasoned, “it is surely most unlikely that the members of the Committee would have stood mute if they had disagreed with it.” Id. at 460, 94 S.Ct. at 494. Here the sponsor of the bill in the House expressed his view, both when introducing the bill and in the House Report, that private actions were available under the CEA. It is “most unlikely” that the legislators considering the amendments “would have stood mute if they had disagreed with it.”

Finally, Justice Stewart emphasized that allowing private suits would be inconsistent with the legislative purpose of the Amtrak Act, since Congress was deeply concerned with paring rail passenger routes efficiently and without time-consuming proceedings. Id. at 458, 94 S.Ct. at 493. This would have been reason enough not to imply a private cause of action even under Borak, 377 U.S. at 432, 84 S.Ct. at 1559. See also SIPC v. Barbour, 421 U.S. 412, 418, 421, 95 S.Ct. 1733, 1737, 1739, 44 L.Ed.2d 263 (1975) (Amtrak viewed as case where proposed right of action was inconsistent with legislative purpose). Here there is little dispute that the purposes of the CEA would be effectuated by private actions.

In light of this it is unnecessary to dwell on just how far the recent triad of Cannon, Redington and Transamerica, [Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146] may have gone in limiting the implied cause of action. We do think, however, that the rumors about the death of the implied cause of action which have been circulating in the wake of these decisions-an attitude strongly reflected in the dissent-are exaggerated, at least as far as previously enacted statutes are concerned, and that the effect of the decisions is simply to emphasize that the ultimate touchstone is congressional intent and not judicial notions of what would constitute wise policy. See Zeffiro v. First Pennsylvania Banking and Trust Company, 623 F.2d 290 (3 Cir., May 29, 1980) (No. 79-2259) (injured debenture holder can bring implied cause of action under Trust Indenture Act against indenture trustee who breaches agreement). Two of the decisions themselves recognized implied actions, Cannon under Title IX and Transamerica under § 215 of the Investment Advisers Act. Cannon is strong support for the result we have reached in this case, since the majority opinion recognized the earlier view on implying rights of action and expressly directed courts to consider Congressional action in light of this legal context. Both Redington, which found no implied right of action under § 17(a) of the 1934 Securities Exchange Act, and Transamerica, which found no implied action for damages under § 206 of the 1940 Investment Advisers Act, considered statutes which were enacted pri- or to the great explosion in judicial recognition of implied rights. Unlike the congressional action in 1974 involved in this case, or that in 1972 involved in Cannon, the congressional actions in 1934 and 1940 under review in Redington and Transamerica were not taken against a background of widespread judicial recognition of implied private causes of action for damages either as a general matter or with respect to the specific subject matter of those statutes. Further, the legislative history on private rights of action in both Redington and Transamerica was "entirely silent,” 442 U.S. at 571-72, 99 S.Ct. at 2485-87, 444 U.S. at 17, 100 S.Ct. at 246, 62 L.Ed.2d at 153-quite unlike the instant case. Redington involved a mere reporting provision, as to which there was no history of the implication of private causes of action and which was “flanked by provisions” expressly according such a right, and Transamerica turned largely on the express declaration that certain acts should make contracts void, which was taken to grant a right of rescission but not of damages, and the corresponding history of the jurisdictional clause of the Investment Advisers Act. Far from foreclosing implication of private rights of action, Transamerica explicitly noted that the intent to provide such actions “may appear implicitly in the language or structure of the statute, or in the circumstances of its enactment.” Id. 444 U.S. at 18, 100 S.Ct. at 246, 62 L.Ed.2d at 154.

Even if we were to accept arguendo that the Cannon-Redington-Transamerica triad would call for affirmance if they had been rendered before the 1974 amendments to the CEA were enacted, the legislative history demonstrates beyond fair doubt that Congress relied on and approved the unanimous course of decisions recognizing private causes of action under the CEA, which in turn, were solidly based on the Supreme Court’s decision in Borak. Even if that decision were now to be regarded as an aberration, see Cannon, supra, 441 U.S. at 735-36, 99 S.Ct. at 1977-78 (Powell, J., dissenting); Redington, supra, 442 U.S. at 576-77, 99 S.Ct. at 2489-2490, this affords no basis for thinking that the 1974 Congress had any idea there would be such a drastic change in the Court’s thinking.

Appellees also argue that the statutory provisions at issue cannot support a private cause of action because they merely proscribe certain conduct or prescribe duties, rather than explicitly creating rights (§§ 4a, 4b, 5(d), 5a(8)). It is true that the form in which Congress casts a statutory provision may serve as some indicator of the propriety of implication, see Cannon, supra, 441 U.S. at 690 n.13, 99 S.Ct. at 1954 n.13; Transamerica, supra, 444 U.S. at 18, 100 S.Ct. at 246, 62 L.Ed.2d at 154, but this is by no means determinative. When, as here, the legislative history and the “circumstances of [a statute’s] enactment” evince a clear intent to preserve a private cause of action, the form in which this intent is expressed cannot be permitted to become an obstacle to its realization. The cases do not purport to establish a linguistic test for implication and, in any event, the securities cases are an exception to the right/duty dichotomy. Cannon, supra, 441 U.S. at 690-92 n.13, 99 S.Ct. at 1954. Even if Congress were aware of the perceived significance of this dichotomy in 1974, which it was not, there would have been no reason for it to suppose that the CEA would not fall under this same exception.

The same considerations refute the claim that a criminal provision such as § 9(b) cannot support a private cause of action. Prior to 1974 courts had implied a cause of action under this provision, see, e. g., Deaktor, supra, 479 F.2d at 534, and the Supreme Court had implied such actions from other penal provisions, see, e. g., Borak, supra. There was no reason for Congress in 1974 to suppose that this would not continue. In Cort v. Ash, supra, decided after passage of the 1974 amendments, Justice Brennan declined to imply a private cause of action in favor of a shareholder suing derivatively from a criminal statute prohibiting corporations from making certain specified political contributions. He was careful to note, however, that “provision of a criminal penalty does not necessarily preclude implication of a private cause of action for damages,” and he refused to “go so far as to say that ... a bare criminal statute can never be deemed sufficiently protective of some special group so as to give rise to a private cause of action by a member of that group.” 422 U.S. at 79-80, 95 S.Ct. at 2088 (emphasis in original). He rested the decision on the basis that “the intent to protect corporate shareholders particularly was at best a subsidiary purpose of § 610, and the other relevant factors are all either not helpful or militate against implying a private cause of action.” Id. In the case of the CEA we have found abundant evidence in the legislative history that the intent to protect traders in commodity futures was the dominant purpose and the other relevant factors also militate in favor of implying the cause of action. Moreover, the CEA cannot be characterized as a “bare criminal statute”. It is replete with civil remedies which involve the courts either directly or on review of CFTC action. See, e. g., § 6(b) (civil fines for, inter alia, manipulation); § 6b (cease and desist orders); § 6d (state actions for damages on behalf of residents); § 5b (suspension or revocation of contract market designation); § 14 (reparations). This is not at all a case where a court should be held back from implying a private cause of action because of a legitimate fear that Congress intended only criminal sanctions to apply to certain prohibited conduct.

As previously noted, see note 38, supra, appellees and the dissent also argue that no right of action should be implied because Congress did not enact proposals containing explicit rights of action which were before it. Indeed, the dissent repeatedly refers to one house or another of Congress having “rejected” amendments, when it merely failed to act upon them. The effect of such a failure is quite different from the voting down of an amendment, something that the word “rejection” inevitably calls to mind. A house of Congress may have failed to act on an amendment for any number of reasons other than opposition to it-belief that the point was already covered by existing law, see Diamond Crystal Salt Co. v. P. J. Ritter Co., 419 F.2d 147, 148 (1 Cir. 1969); Burlington Truck Lines v. Iowa Employment Security Comm’n, 239 Iowa 752, 32 N.W.2d 792, 797 (1949); objection to the particular terms and inertia in the way of correction, see note 38, supra; or just plain loss in the legislative shuffle. The language of United States v. United Mine Workers, 330 U.S. 258, 283, 67 S.Ct. 677, 691, 91 L.Ed. 884 (1947), with regard to the failure of the House to enact a bill specifically providing for the injunctive relief there sought by the United States is peculiarly apt-“the fact that the House version did not provide for the issuance of injunctions to aid in the operation of seized plants is not the issue here. Rather it is whether the House expressed any intent to restrict the existing authority of the courts.” See also Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381-82 n.11, 89 S.Ct. 1794, 1801-1802, 23 L.Ed.2d 371 (1969) (“. .. unsuccessful attempts at legislation are not the best guides to legislative intent”).³⁹

Although the Supreme Court has very recently warned in Consumer Product Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 117, 100 S.Ct. 2051, 2060, 64 L.Ed.2d 766 (1980), quoting from United States v. Price, 361 U.S. 304, 313, 80 S.Ct. 326, 331, 4 L.Ed.2d 334 (1960), which, in turn, was quoted in United States v. Philadelphia National Bank, 374 U.S. 321, 348-49, 83 S.Ct. 1715, 1722, 10 L.Ed.2d 915 (1963), that “the views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one,” see also the discussion at 447 U.S. at 118, n. 13, 100 S.Ct. at 2061, NYME, the opinion below and the dissent rely heavily on a 1978 amendment adding § 6d, which authorizes state officials to bring suits in federal courts to enjoin violations of the Act and to obtain monetary redress for their residents against violators other than exchanges. NYME asserts that the exception demonstrates a congressional desire that no private actions should exist against exchanges; the dissent takes broader grounds.

In fact, the evolution of § 6d actually supports rather than undermines the implication of a private cause of action against the exchanges. Section 6d was added during the reauthorization of the CFTC pursuant to the sunset provision in the 1974 amendments, 88 Stat. 1391. The period between 1974 and 1978 had seen the rise of widespread fraud off the regulated and supervised contract markets, particularly in the form of commodity options and leverage contracts. The CFTC was severely criticized for its failure to protect investors in this area, and the states were eager to take matters into their own hands and protect their residents. See generally Lower, State Enforcement of the Commodity Exchange Act, 27 Emory L. J. 1057 (1978); Young, A Test of Federal Sunset: Congressional Reauthorization of the CFTC, 27 Emory L. J. 853 (1978). Some had, see, e. g., Kelley v. Carr, supra, 442 F.Supp. 346 (W.D.Mich. 1977), but others were hamstrung by perceived limitations in the parens patriae doctrine. H.R.Rep.No.95-1181, supra, at 14. The addition of § 6d was designed to remove these doubts and to enlist the prosecutorial and enforcement tools of the states to aid the CFTC in correcting abuses primarily off the contract markets. See id. at 15 (§ 6d “is intended, among other things, to provide the several states with the power ... to protect their citizens from persons, such as London options firms, vendors of dealer options and merchants of so-called leverage contracts who perpetuate fraudulent and other practices made unlawful by the Federal law”). See also Curran v. Merrill Lynch, supra, note 1, 622 F.2d at 232 n.24. Since this concern was largely with off-market abuses, contract markets, clearinghouses, and floor brokers were exempted from the coverage of § 6d. See S.Rep.No. 95-850, 95th Cong., 2d Sess. 25-26 (1978) (activities of these persons “generally of the character of ‘pit trading’ rather than customer contact”); 124 Cong.Rec. S.10561 (July 12, 1978) (Remarks of Sen. Bellmon).

Indeed, the legislative history indicates that the perceived existence of an implied prívate cause of action against exchanges was actually one of the reasons for their exemption from § 6d. Explaining the exemption, Senator Leahy of the responsible committee noted that:

The exemption from State suits provided to contract markets is justified due to the deterrent effect on contract markets caused by Commission regulation, institution of Commission enforcement proceedings, and the implied private rights of action that may be brought against those contract markets that fail to discharge their duties under the Commodity Exchange Act. 124 Cong.Rec. S.16527 (Sept. 28, 1978) (emphasis supplied).

Since Congress explicitly relied on judicially implied rights of action in fashioning the exemption in § 6d, that exemption can hardly be cited as evidence of a desire to insulate exchanges from such actions. See also Smith v. Groover, supra, 468 F.Supp. at 117 (“We fail to see how an apparent congressional unwillingness to extend the liability of contract markets suggests an intention to abolish such liability altogether").⁴⁰

This analysis is enough to answer NYME’s major contention, namely, that the exemption of contract markets from the parens patriae actions newly authorized in 1978 is evidence that Congress did not mean them to be subject to private actions of any sort. The dissent adds two broader arguments. The first is that the 1978 amendment offered Congress an opportunity expressly to affirm the private right of action in the face of a few district court decisions that this no longer existed in the light of the 1974 legislation and what the dissent calls “the Supreme Court’s recent but well-publicized adoption of somewhat stricter principles governing the implication of private causes of action.” There are several answers. The first is that in 1978 Congress was concentrating on parens patriae suits; it was not considering a general revision of the CEA. “The logic of defendants’ argument would be to require federal courts to prohibit private actions with respect to any statute amended in any way after the mid-1970’s if Congress did not explicitly create a private right of action.” Navigator Group Funds, supra, at 424 note 19. The second is that while Senator Huddleston cited two district court decisions which had denied a private right of action under the 1974 amendments, these were regarded as “unfortunate” and contrary to the many others he listed that had recognized the continued existence of such actions. 124 Cong.Rec. S.10537 (July 12, 1978). Indeed the Senator expected additional causes of action to be recognized under other provisions of the CEA in the future, a view that hardly comports with fear of a new restrictive trend in implication jurisprudence. The third is that the asserted new trend in Supreme Court decisions had not yet begun, let alone been “well-publicized”. Cort, which cited with approval both Rigsby and Borak, 422 U.S. at 78, 95 S.Ct. at 2087, merely disallowed a private cause of action in the case sub judice. It did not indicate any new trend, and the courts have not so regarded it. As Mr. Justice Powell noted in his Cannon dissent of 1979, 441 U.S. at 741, 99 S.Ct. at 1980, “In the four years since we decided Cort, no less than 20 decisions by the Courts of Appeals have implied private actions from federal statutes.” Piper v. Chris-Craft Industries, 430 U.S. 1, 97 S.Ct. 926, 51 L.Ed.2d 124 (1977), paid respectful attention to Borak, supra, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 as Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 730, 95 S.Ct. 1917, 1922, 44 L.Ed.2d 539 (1975) had also done, and to Superintendent of Insurance, supra, 404 U.S. 6, 92 S.Ct. 165, 30 L.Ed.2d 128. The issue decided adversely to the plaintiffs in these cases was not whether an implied cause of action existed generally but whether the particular plaintiffs came within the protected class. The other cases cited are even less to the point. The first indication of a changed attitude that could be detected by anyone reading the Court’s opinions without an exceedingly high powered magnifying glass, not possessed even by the courts of appeals, much less by the Congress, was the 1979 opinion in Cannon -and there not in the decision, which was favorable to the plaintiff, but in footnote 6 to Mr. Justice Stevens’ opinion, and especially in the dissenting opinion of Mr. Justice Powell.

The dissent argues finally that the express conferring of a right of action upon the states in 1978 shows that Congress thought such action to be necessary before any private cause of action could exist. The assertion is belied by the very passage from the House Report from which the dissent quotes. There was no history of recognition of causes of action by the states on behalf of their residents; indeed the very existence of parens patriae actions for other than a state’s own financial loss had been called into most serious question by Hawaii v. Standard Oil Co. of California, 405 U.S. 251, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972). The fact that only express legislation could overcome that decision does not at all suggest that Congress meant to destroy an implied cause of action by victims of proscribed practices which the courts had upheld since 1967 and Congress had recognized in 1974.⁴¹

3. Our answer to the second question posed by Cort largely determines that to the third, “is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff?” Indeed, the question need hardly be asked in a case where, as we have found here, there is abundant evidence that Congress affirmatively intended the private remedy to continue. If Congress clearly thought the remedy to be consistent, it would be of no moment that a court should have doubts about this. Moreover, we have been pointed to nothing that would show how maintenance of suits such as these can impede the functioning of the CEA. If questions should arise in which a court would be aided by consideration by the CFTC, the procedure of a stay pending Commission consideration, which the Court directed in Deaktor, supra, 414 U.S. at 115, 94 S.Ct. at 467 is available. The Commission sees no inconsistency. To the contrary, it tells us in its amicus brief (p. 15) that:

private damage suits under the Act are consistent and may coexist with the forums expressly provided by Congress for the adjudication of complaints of futures traders-Commission reparation proceedings and contract market arbitration proceedings. The Commission has carefully harmonized these three rights that, in its view, have offered a commodity trader an election of remedies since 1974. (footnotes omitted).

The Commission also notes that it “is an agency with limited resources which are insufficient to permit it to police all commodity-related transactions” (p. 34), and that the private damage remedy, in the words of Cannon, “is necessary or at least helpful to the accomplishment of the statutory purpose,” 441 U.S. at 703, 99 S.Ct. at 1961. Such expressions by the agency charged with the administration of the statute are entitled to substantial weight. Cannon, supra, 441 U.S. 706-08 & n.42, 99 S.Ct. 1962-63 n.42.

4. Fortunately, little space needs to be devoted to the fourth Cort factor, “is the cause of action one traditionally relegated to state law, so that it would be inappropriate to infer a cause of action based solely on federal law?”, 422 U.S. at 78, 95 S.Ct. at 2088. The answer is clearly in the negative. The federal government has been vitally concerned with trading in futures since 1922; indeed, the courts have held that § 2(a)(1) of the CEA preempts the application of state law. See International Trading, Ltd. v. Bell, 262 Ark. 244, 566 S.W.2d 420 (1977); Bromberg & Lowenfels, supra, at § 4.6 (471); Johnson, supra.

Having answered the first and third Cort questions in the affirmative and the fourth in the negative, and having found as to the second that there is ample evidence of legislative intent to preserve a private remedy, we conclude, in accordance with the Sixth Circuit’s decision in Curran v. Merrill Lynch, see note 1 supra, that the district court was in error in holding that no private cause of action in damages for violation of the CEA existed. Since the district court struck all the claims under the CEA, we need not now consider which claims, if any, were within the antifraud provision, § 4b, ¿s distinguished from the antimanipulation provision, § 9(b), relied on as to all defendants; § 4a, relied on as to the conspirators and their brokers; and §§ 5(d) and 5a(8), relied on as to the NYME. Although the other provisions are fairly straight-forward and clearly cover the activities alleged in the complaint, § 4b, to put it mildly, is not an easy provision to construe. Commentators have said of it that “While the intent to outlaw fraud is clear from the (A)-(C) subparagraphs, the syntactical mess which precedes them makes it difficult to answer some basic questions about coverage.” Bromberg & Lowenfels, supra, § 452, at 82.286. Appellees are wrong in saying that § 4b by its terms only prohibits “any person” from defrauding “any other person” in connection with the making of a futures contract for or on behalf of that other person. Thus, if A defrauds broker B, who was making a futures contract for C, A would have defrauded C in connection with a futures contract made for C, although C is not A’s customer.⁴² The applicability of § 4b may well extend even further, since it could be argued that one trading for his own account makes a contract “for” himself, thus bringing fraud between two principals within the confused language of § 4b. The legislative history of the provision contains some statements which indicate an intent to protect “customers”, see H.R.Rep.No.1522, 73d Cong., 2d Sess. 5 (1934), although this is never suggested as the limit of coverage, and other statements which suggest a broad construction, see H.R.Rep.No.1551, 72d Cong., 1st Sess. 1 (1932); 80 Cong.Rec. 6162 (April 27,1936) (Remarks of Sen. Pope); id. at 7853 (May 25, 1936); H.R.Rep.No.743, 90th Cong., 1st Sess. 3 (1967); S.Rep.No. 947, 90th Cong., 2d Sess., reprinted in 2 U.S.Code Cong. & Admin.News pp. 1673, 1678 (1968). When clarification of the section was suggested in 1974, Senator Clark read § 4b as an examp'e of archaic language, but took it as “simply try[ing] to convey the idea that it is unlawful for any person to cheat or defraud another person.” Hearings on S. 2485, S. 2578, S. 2837, and H.R. 13113 Before the Senate Committee on Agriculture and Forestry, supra, at 687 (Sen. Clark). Senator Clark was echoing the views of a predecessor considering the section when it was proposed: “[T]he object of the legislation is, or should be, to prevent deceptive or fraudulent transactions. Any language which accomplished that end is worthy of consideration.” 80 Cong.Rec. 7871 (May 25, 1936) (Remarks of Sen. Robinson). None of the cases recognizing an implied right of action under § 4b suggest limitation to the broker-customer relation. Their reasoning is broader, and they frequently cite non-§ 4b cases such as Deaktor. In Hirk v. Agri-Research Council, Inc., supra, 561 F.2d at 104, the court suggested that, in line with Superintendent of Insurance v. Bankers Life & Casualty Co., supra, 404 U.S. at 12, 92 S.Ct. at 168, the language of § 4b must be read “flexibly, not technically and restrictively.” The dissent is thus seriously mistaken in assuming that § 4b will necessarily be limited to cases coming within its crabbed language. We deem it inadvisable to rule on the applicability of § 4b without the benefit of evidence of the exact relations among the various parties; indeed plaintiffs may find it unnecessary to rely on this section. It is enough for present purposes that the CEA counts stricken from the complaints clearly charged a gross violation of the prohibition of manipulation, § 9(b), of the very type against which Congress had been legislating for half a century, as well as §§ 5(d) and 5a(8).

The order of the District Court is reversed.

1 . The length of our treatment, particularly the explanation of the nature of the Commodities Futures Market in Part I and the history of congressional regulation in Part III, is also partly due to the fact that when the case was argued and for some time after the majority opinion was prepared, no court of appeals had passed on the question and we anticipated being the first to do so. However, in a case decided May 12, 1980, a divided panel of the Court of Appeals for the Sixth Circuit reached the issue sua sponte and, in an excellent and succinct opinion, held, as we do, on largely the same reasoning, that there is an implied private right of action under the CEA. Curran v. Merrill Lynch, Pierce, Fenner and Smith, Inc., 622 F.2d 216 (1980). Although, as argued in the dissent, Curran involved a suit by a customer against a broker, the court did not limit its reasoning to that situation.

2 . See H.R.Rep.No.93-975, supra, at 129 (less than 3% of all futures contracts culminate in delivery); T. Hieronymus, Economics of Futures Trading 41 (1977) (less than 1%). Neither the speculative investor nor the person using the futures market as a hedge for his position in the market for the actual commodity generally desires delivery. H.R.Rep.No.93-975, supra, at 129. See Volhart Brothers, Inc. v. Freeman, 311 F.2d 52, 55-56 (5 Cir. 1962); Note, The Delivery Requirement: An Illusory Bar to Regulation of Manipulation in Commodity Exchanges, 73 Yale L.J. 171, 173 (1963).

In occasional instances, however, people do use futures trading as an alternative market for the physical commodity. H.R.Rep.No.93-975, supra, at 132. Delivery is made through the clearing house by transfer of warehouse receipts or rights to loaded freight cars and then transported according to the purchaser’s instructions. See Cargill, Inc. v. Hardin, 452 F.2d 1154, 1157 (8 Cir. 1971), cert. denied, 406 U.S. 932, 92 S.Ct. 1770, 32 L.Ed.2d 135 (1972).

3 . Johnston, Understanding the Dynamics of Commodity Trading, 35 Bus.Law. 705, 709 (1980), states that “[a]s a general rule, for a market to be broad enough to be efficient and to accommodate the extremely large orders that come in from time to time from dealers and commercial firms, 50 to 75 percent of the open interest and volume of trading must come from speculators-this is essential for there to be a viable market.”

4 . We say here once and for all that our statement, in large measure, is simply what the plaintiffs contend to be the facts and is not to be read as one of facts found. Accordingly we will generally dispense with use of words such as “allegedly”, “asserted” and “claimed”.

5 . This reads as follows:

44.02 -FINAL DAY OF TRADING

(a) On the final day of trading in the delivery month, it shall be the responsibility of each clearinghouse member who is not in a position to fulfill his contractual obligation on any maturing contract by prescribed notice and tender, to have a liquidating order entered on the Exchange floor not later than five minutes before the time established as the official close for such delivery month. All such orders shall be market orders to be executed prior to the expiration of trading.

(b) On the final day of trading no stop orders will be accepted; no time limit or contingent orders will be accepted, and brokers will not be expected to assume responsibility for the execution of orders placed later than 15 minutes prior to the close of trading.

(c) Cancellations that reach the trading floor after one half Qh) hour prior to the time trading is scheduled to cease on the last day of trading in an expiring future may involve extraordinary problems and hence will be accepted solely at the risk of the customer.

6 . For a precise statement of the motions and their disposition, see 470 F.Supp. at 1257 n.l, 1263-64.

7 . This provision currently reads as follows:

(1) Excessive speculation in any commodity under contract of sale of such commodity for future delivery made on or subject to the rules of contract markets causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity. For the purpose of diminishing, eliminating, or preventing such burden, the Commission shall, from time to time, after due notice and opportunity for hearing, by order, proclaim and fix such limits on the amount of trading which may be done or positions which may be held by any person under contracts of sale of such commodity for future delivery on or subject to the rules of any contract market as the Commission finds are necessary to diminish, eliminate, or prevent such burden. In determining whether any person has exceeded such limits, the positions held and trading done by any persons directly or indirectly controlled by such person shall be included with the positions held and trading done by such person; and further, such limits upon positions and trading shall apply to positions held by, and trading done by, two or more persons acting pursuant to an expressed or implied agreement or understanding, the same as if the positions were held by, or the trading were done by, a single person.

(2) The Commission shall in such order fix a reasonable time (not to exceed ten days) after the order’s promulgation; after which, and until such order is suspended, modified, or revoked, it shall be unlawful for any person-

(A) directly or indirectly to buy or sell, or agree to buy or sell, under contracts of sale such commodity for future delivery on or subject to the rules of the contract market or markets to which the order applies, any amount of such commodity during any one business day in excess of any trading limit fixed for one business day by the Commission in such order for or with respect to such commodity; or

(B) directly or indirectly to hold or control a net long or a net short position in any commodity for future delivery on or subject to the rules of any contract market in excess of any position limit fixed by the Commission for or with respect to such commodity: Provided, That such position limit shall not apply to a position acquired in good faith prior to the effective date of such order.

⁸

It shall be unlawful (1) for any member of a contract market, 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 contract market, 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, on or subject to the rules of any contract market, 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 by products thereof, or (b) determining the price basis of any transaction in interstate commerce in such commodity sold, shipped, or received in interstate commerce for the fulfillment thereof-

(A) to cheat or defraud or attempt to cheat or defraud such other person;

(B) 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;

⁹

(8) enforce all bylaws, rules, regulations, and resolutions, made or issued by it or by the governing board thereof or any committee, which relate to terms and conditions in contracts of sale to be executed on or subject to the rules of such contract market or relate to other trading requirements, and which have been approved by the Commission pursuant to paragraph (12) of section 5a of this Act; and revoke and not enforce any such bylaw, rule, regulation, or resolution, made, issued, or proposed by it or by the governing board thereof or any committee, which has been disapproved by the Commission.

¹⁰

It shall be a felony punishable by a fine of not more than $500,000 or imprisonment for not more than five years, or both, together, with the costs of prosecution, for any person to manipulate or attempt to manipulate the price of any commodity in interstate commerce, or for future delivery on or subject to the rules of any contract market, or to corner or to attempt to corner any such commodity, or knowingly to deliver or cause to be delivered for transmission through the mails or in interstate commerce by telegraph, telephone, wireless, or other means of communication false or misleading or knowingly inaccurate reports concerning crop or market information or conditions that affect or tend to affect the price of any commodity in interstate commerce or knowingly to violate the provisions of section 4, section 4b, section 4c(b) through section 4c(e), section 4h, section 4o (1), or section 19 of this Act, or knowingly to make any false or misleading statement of a material fact in any registration application or report filed with the Commission, or knowingly to omit in any application or report any material fact that is required to be stated therein. Notwithstanding the foregoing, in the case of any violation described in the foregoing sentence by a person who is an individual, the fine shall not be more than $100,000, together with the costs of prosecution.

11 . While the point is of no great importance as regards this case, we take issue with the statement in the dissent, page 342, that Colonial Realty Corp. v. Bache & Co., 358 F.2d 178 (2 Cir.), cert. denied, 385 U.S. 817, 87 S.Ct. 40, 17 L.Ed.2d 56 (1966), held that violation of a rule of the New York Stock Exchange could not give rise to an implied cause of action. Our conclusion was that violation of certain types of rules would give rise to an implied cause of action, especially “when the rule imposes an explicit duty unknown to the common law”, but that violation of the rule there at issue, requiring brokers to observe “just and equitable principles of trade", did not. Id. at 182-83. We likewise do not accept the statement in footnote 8 that “it is now well recognized that a private right of action may not be implied for a violation of a rule of the New York Stock Exchange,” citing Jablon v. Dean Witter & Co., 614 F.2d 677 (9 Cir. 1980). Although the particular rule at issue in Jablon, the “know your customer” rule, Rule 405 of the New York Stock Exchange, seems analogous to the rule at issue in Colonial Realty and we thus have no quarrel with the result, we do not necessarily accept the broad language of the Jablon opinion. In view of our conclusion that plaintiffs have alleged violations of other sections of the Act which give rise to private claims, it is unnecessary for us now to decide whether such an action would lie for violation of NYME Rule § 44.02.

So far as concerns the dissent’s citation of O'Neill v. Maytag, 339 F.2d 764 (2 Cir. 1964), as a case denying a private right of action in the securities area, that decision rested on the scope of Rule 10b-5 and in no way challenged the proposition that a private cause of action would lie if the facts came within the Rule.

12 . Indeed, at the time Congress considered and passed the 1974 amendments to the CEA, the Supreme Court had never rejected a request to imply a cause of action under the federal securities laws. Pitt, Standing to Sue Under the Williams Act After Chris Craft, 34 Bus.Law. 117, 121 (1978).

The suggestion in the dissent that the Superintendent of insurance case was a grudging acquiescence in 25 years of lower court decisions, although finding some support in a footnote to Cannon v. Univ. of Chicago, 441 U.S. 677, 692, n.13, 99 S.Ct. 1946, 60 L.Ed.2d 560 ignores the language of the opinion in Superintendent of Insurance and the climate of the times. The Supreme Court there reversed a decision of this court refusing to apply § 10(b) under circumstances which pressed that section to its absolute limit. The Court quoted not simply in acquiescence but with strong approval the statement in Shell v. Helmsley, 430 F.2d 819, 827 (5 Cir. 1970):

When a person who is dealing with a corporation in a securities transaction denies the corporation’s directors access to material information known to him, the corporation is disabled from availing itself of an informed judgment on the part of its board regarding the merits of the transaction. In this situation the private right of action recognized under Rule 10b-5 is available as a remedy for the corporate disability.

And all this under a statute which expressly created three private actions, §§ 9(e), 16(b) and 18, with respect to various types of securities transactions that were far more efficacious than the reparations procedure of the 1974 amendments to the CEA. See 6 Loss, Securities Regulation at 3689-73 (1969), suggesting that for this and other reasons the Borak decision would not necessarily preclude a different ruling with respect to the existence of a private cause of action under § 10(b)-a ruling which never came.

13 . Indeed, in several other important cases under the Investment Company Act, defendants represented by able counsel did not even think it worthwhile to question the existence of an implied private cause of action. See, e. g., Rosenfeld v. Black, 445 F.2d 1337 (2 Cir. 1971), cert. dismissed, 409 U.S. 802, 93 S.Ct. 24, 34 L.Ed.2d 62 (1972); Moses v. Burgin, 445 F.2d 369 (1 Cir.), cert. denied, 404 U.S. 994, 92 S.Ct. 532, 30 L.Ed.2d 547 (1971); Fogel v. Chestnutt, 533 F.2d 731 (2 Cir. 1975), cert. denied, 429 U.S. 824, 97 S.Ct. 77, 50 L.Ed.2d 86 (1976).

14 . While there are differences between the commodities and securities fields, what is relevant to the present question is the common legislative objective of insuring fair dealing for investors on what are important public markets, and the common legislative approach to attaining this objective. The analogy between the two fields has been repeatedly recognized by Congress, see, e. g., S.Rep.No.93-1131, supra, at 19; H.R.Rep.No.93975, supra, at 39. The 1936 amendments arose from an explicit concern to make protection in the commodities field as strong as it was in the securities field, lest the unscrupulous would simply transfer this operations from one market to another. H.R.Rep.No. 1522, 73d Cong., 2d Sess. 2 (1934); 78 Cong.Rec. 10446 (June 4, 1934) (Remarks of Chairman Jones of the House Committee on Agriculture); 79 Cong.Rec. 8589 (June 3, 1935) (same). The analogy has been frequently accepted by the courts, see, e. g., Silverman v. CFTC, 562 F.2d 432, 438 (7 Cir. 1977) (quoting Moore, J., in Savage v. CFTC, 548 F.2d 192, 197 (7 Cir. 1977)); P. J. Taggares Co. v. NYME, 476 F.Supp. 72, 77-78 (S.D.N.Y.1979) (Weinfeld, J.); by the CFTC, see, e. g., brief amicus curiae at 12; and by the commentators, see, e. g., Markham and Meltzer, Secondary Liability Under the Commodity Exchange Act, 27 Emory L.J. 1115(1978); Note, Private Rights of Action for Commodity Futures Investors, 55 B.U.L. Rev. 804, 821-22 (1975). Congress was not only aware of the implied right of action under the CEA in 1974, as shown below, but surely was also aware of the private right of action recognized in the analogous field of securities regulation.

15 . Although it is true, as stated in Justice Powell’s dissent in Cannon v. University of Chicago, 441 U.S. at 735, 99 S.Ct. at 1977, that “During this same period, the Court frequently turned back private plaintiffs seeking to imply causes of action from federal statutes,” 441 U.S. at 735, 99 S.Ct. at 1977, citing the same cases mentioned in Judge Mansfield’s dissent, there can be no doubt that particularly in the closely related field of violations of statutes administered by the SEC, the implied cause of action was so much taken for granted that usually the issue was not even raised. See note 13 supra. There are many instances of this under the CEA itself, both before and after the 1974 amendments. See, e.g., Booth v. Peavey Company Commodity Services, 430 F.2d 132, 133 (8 Cir. 1970); Ames v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 567 F.2d 1174, 1176 (2 Cir. 1977) (“It is agreed that there is an implied cause of action under the Act for a private remedy.”); Hofmayer v. Dean Witter & Co., Inc., 459 F.Supp. 733, 737 (N.D.Cal. 1978). In addition several courts have begun the process of delineating the precise contours of the private cause of action under the CEA, aided of course by the securities law analogy, assuming either arguendo or implicitly that such an action exists. See, e.g., Miller v. New York Produce Exchange, 434 U.S. 823, 98 S.Ct. 68, 54 L.Ed.2d 80 (1977); Master Commodities, Inc. v. Texas Cattle Management Co., 586 F.2d 1352 (10 Cir. 1978); Moody v. Bache & Co., Inc., 570 F.2d 523 (5 Cir. 1978); P.J. Taggares Co. v. NYME, supra, 476 F.Supp. 72.

16 . The dissent’s suggestion, p. 341 that victims of frauds in futures trading had never resorted to the federal courts prior to Goodman, which was “the first case to break the barrier”, lacks adequate empirical basis. Judge Carter’s opinion in the Salad Oil case, Seligson v. New York Produce Exchange, 376 F.Supp. 1076, 1080, rendered in 1974, tells us that this swindle of the early 1960’s “led to a string of lawsuits and investigations extending over the past ten years.” It is not unlikely that many counsel for defendants confronted with the array of cases under the statutes administered by the SEC, did not think it worthwhile to question the existence of a private cause of action under the CEA-just as their counterparts in well-known cases under the Investment Company Act had failed to do so, see note 13 supra.

While we think the dissent’s attacks on the reasoning of Goodman are exaggerated, this is irrelevant, since the courts followed and extended it without the slightest question, and Congress necessarily regarded these decisions, stretching over seven years, as representing the law.

. Mr. Justice Stewart would have affirmed and allowed the action to proceed directly in the district court. 414 U.S. at 416, 94 S.Ct. 467.

17 . We fail to appreciate the dissent’s attempt to distinguish these two cases. With respect to Egg Producers, if implied private causes of action did not exist under the Act, there would be no cause of action for an injunction any more than there would be for damages. The Seligson decision was rendered before Senate consideration of the 1974 amendments and House repassage in the amended form. Moreover, what the dissent fails adequately to recognize is that the cases under the CEA, numerous and consistent as they are, cannot be taken in isolation but must be considered along with the vast body of law under the securities statutes which set the tone during the late ’40’s, the ’50’s, the ’60’s, and the early ’70’s, and on which the CEA decisions relied. The efforts to whittle all this away, pages 342-343, are unimpressive. We have already dealt, note 14 supra, with the argument as to the cases under Rule 10b-5. The contention that the securities legislation offered less in the way of remedies than the CEA would surprise most students of securities law; with the single exception of the 1974 reparations procedure for certain types of CEA violations, whose inadequacies are described below, they offered more. The argument that the sections of the CEA most heavily relied upon by plaintiffs were enacted before the explosion of the private right of action under the securities laws ignores the fact that the 1974 amendments to the CEA were intended to be a complete overhaul and were effected with vivid Congressional awareness of the decisions implying private causes of action under the CEA as well as the related subject of the laws administered by the SEC.

18 . Congress was, however, apparently aware of the pendency of at least one of these cases. See note 30 infra.

19 . Cases finding an implied cause of action: Milani v. ContiCommodity Serv., Inc., 462 F.Supp. 405 (N.D.Cal.1976); Shearson Hayden Stone v. Lumber Merchants, Inc., 423 F.Supp. 559 (S.D.Fla.1976); Bache Halsey Stuart, Inc. v. French, 425 F.Supp. 1231 (D.D.C.1977); Kelley v. Carr, 442 F.Supp. 346 (W.D.Mich.1977), rev’d on other grounds, Nos. 78-1091, 1092, 5542, 5460, — F.2d —(6 Cir., May 16, 1980); Hofmayer v. Dean Witter & Co., 459 F.Supp. 733 (N.D.Cal.1978); Berenson v. Madda Trading Co., CCH Comm.Fut.L.Rep. 20,689 (D.D.C.1978); Gravois v. Fairchild, Arabatzis & Smith, Inc., CCH Comm.Fut.L.Rep. 20,706 (E.D.La.1978); Rivers v. Rosenthal & Co., Civ. Action File No. CV 178-186 (S.D.Ga.1978), appeal pending, 79-1313 (5 Cir.); Poplar Grove Planting and Refining Co., Inc. v. Bache Halsey Stuart Inc., 465 F.Supp. 585 (N.D.La.1979); Jones v. B. C. Christopher & Co., 466 F.Supp. 213 (D.Kansas 1979); R. J. Hereley & Son v. Stotler & Co., 466 F.Supp. 345 (N.D.Ill.1979); Aiken v. Lerner, Civ. Act. No. 79-0023 (D.N.J. 1980); Navigator Group Funds v. Shearson Hayden Stone Inc., 487 F.Supp. 416 (S.D.N.Y. 1980) (Broderick, J.); Grayson v. Conticommodity Services, Inc., 48 L.W. 2807 (D.D.C., May 23, 1980); Witzel v. Chartered Systems Corporation of New York, Ltd., 490 F.Supp. 343 (D.Minn., May 27, 1980).

To the contrary, in addition to Judge MacMahon’s opinion in this case, 470 F.Supp. 1256, see Arkoosh v. Dean Witter & Co., 415 F.Supp. 535 (D.Neb.1976), aff’d on other grounds, 571 F.2d 437 (8 Cir. 1978); Consolo v. Hornblower & Weeks-Hemphill, Noyes, Inc., 436 F.Supp. 447 (N.D. Ohio 1976); Bartels v. International Commodities Corp., 435 F.Supp. 865 (D.Conn. 1977); Berman v. Bache, Halsey, Stuart, Shields, Inc., 467 F.Supp. 311 (S.D. Ohio 1979); Alkan v. Rosenthal & Co., CCH Comm.Fut.L. Rep. 20,797 (S.D. Ohio 1979); Liang v. Hunt, 477 F.Supp. 891 (N.D.Ill.1979); Fischer v. Rosenthal & Co., 481 F.Supp. 53 (N.D.Tex.1979); Stone v. Saxon and Windsor Group, Ltd., 485 F.Supp. 1212 (N.D.Ill.1980). The three decisions from district courts in Ohio which declined to find an implied cause of action, Con-solo, Berman, and Alkan, are no longer good law in that circuit in light of the Sixth Circuit’s contrary decision in Curran v. Merrill Lynch, cited in note 1 supra.

20 . This is:

In determining whether a private remedy is implicit in a statute not expressly providing one, several factors are relevant. First, is the plaintiff “one of the class for whose especial benefit the statute was enacted.” Texas & Pacific R. Co. v. Rigsby, 241 U.S. 33, 39, 36 S.Ct. 482, 484, 60 L.Ed. 874 (1916) (emphasis supplied)-that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? See, e. g., National Railroad Passenger Corp. v. National Assn. of Railroad Passengers, 414 U.S. 453, 458, 460, 94 S.Ct. 690, 693, 694, 38 L.Ed.2d 646, Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? See e. g., Amtrak, supra, Securities Investor Protection Corp. v. Barbour, 421 U.S. 412, 423, 95 S.Ct. 1733, 1740, 44 L.Ed.2d 263 (1975); Calhoon v. Harvey, 379 U.S. 134, 85 S.Ct. 292, 13 L.Ed.2d 190 (1964). And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law? See Wheeldin v. Wheeler, 373 U.S. 647, 652, 83 S.Ct. 1441, 1445, 10 L.Ed.2d 605 (1963); cf. J. I. Case Co. v. Borak, 377 U.S. 426, 434, 84 S.Ct. 1555, 1560, 12 L.Ed.2d 423 (1964); Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 394-395, 91 S.Ct. 1999, 2003-2004, 29 L.Ed.2d 619 (1971); id. at 400, 91 S.Ct. 1999, 2006, 29 L.Ed.2d 619 (Harlan, J., concurring in judgment).

We read this in light of the later caveat in Touche Ross & Co. v. Redington, 442 U.S. 560, 575, 99 S.Ct. 2479, 2488, 61 L.Ed.2d 82 (1979) that the basic inquiry is always to plumb the intent of Congress, that the Cort factors are simply inquiries helpful in that endeavor, and that satisfaction of one or more of the Cort factors will not alone carry the day.

21 . We find little force in the dissent’s reliance, page 339 and footnote 11, on the failure of the 1968 Congress to enact a section of a bill introduced by Representative Fino providing an explicit right of action against exchanges. Quite apart from the usual problems of relying on actions of an earlier Congress, and much more on its failure to act, see p. 310 infra, the question of a private right of action was simply not considered by Congress in the 1968 amendment process. The bill that became the 1968 amendments, H.R. 13094, never contained a private remedy provision, such a remedy was never mentioned in either congressional report, and was never discussed in congressional debate. The dissent’s picture of Congress’ carefully comparing the bills and deliberately and meaningfully rejecting the provision in Rep. Fino’s bill is indeed based on gossamer. Since the failure to act on the provision in 1968 is only of the slightest significance with respect to congressional intent at that time, its bearing on the effort to discern congressional intent six years later, in 1974, is infinitesimally small.

Beyond all this, when Rep. Fino introduced his bill with the explicit right of action provision, he included with his speech numerous newspaper articles about the commodities industry. One of these discussed the Great Salad Oil Swindle, and noted that two attorneys for the receiver of Ira Haupt & Co., a brokerage firm which went under in that affair, “are trying to determine whether Haupt can justifiably file suit against the exchange for failure to regulate . . .. ” Haupt eventually did, and the court recognized an implied right of action against the exchange, see Seligson v. New York Produce Exchange, supra, 378 F.Supp. 1076. If Congress had given any consideration to Rep. Fino’s bill, it could well have failed to enact the explicit remedy provision because it considered this unnecessary in light of the then judicial climate, as had turned out to be the case for Ira Haupt & Co. before the 1974 amendments were passed, see note 17 supra. This further illustrates that attempting to attach meaning to the failure of Congress, and even more so of a previous Congress, to enact legislation is a speculative enterprise indeed.

22 . See, e. g., 62 Cong.Rec. 9404 (June 26, 1922) (Remarks of Chairman Tincher of the House Committee on Agriculture) (“1 have never said that the sale of wheat for future delivery should be wiped out .. . but have always said, and I still say, that to let a few gamblers manipulate the grain market was not only unfair to the consumer but unfair to the legitimate trader.”); id. at 9412 (Remarks of Rep. Voight, a member of the Committee on Agriculture which reported out the bill) (“The bill will reduce gambling but we can not stop it altogether without hurting both consumer and producer”).

23 . The Court in Hill v. Wallace, supra, had noted that the tax imposed by the 1921 Act applied to sales between members of the Board of Trade in Chicago. “Looked at in this aspect, and without any limitation of the application of the tax to interstate commerce, or to that which Congress may deem, from evidence before it, to be an obstruction to interstate commerce,” the Court could not sustain the Act. 259 U.S. at 68, 42 S.Ct. at 458 Congress responded with § 3, precisely focusing on the interstate aspects of futures trading. See 62 Cong.Rec. 9404 (June 26, 1922) (Remarks of Chairman Tincher of the House Committee on Agriculture) (“We have defined interstate commerce, using the language of the Supreme Court, as applying to grains and this law will not apply to any transaction except interstate transactions as defined by the court.”); id. at 12723 (Sept. 15, 1922) (The Court “called attention to the fact that if grain was in interstate commerce we could reach the situation in this bill; and this bill is strictly following the dictation ... of the Supreme Court . .. ”).

24 . Representative Jones, Chairman of the House Committee on Agriculture, stated that the bill was aimed at eight to sixteen traders on the Chicago Board of Trade “who have been largely responsible for the constant fluctuations in the market ... . ” 78 Cong.Rec. 10446 (June 4, 1934). He later stated that the purpose of the bill was “to check manipulation of markets by certain big traders [who] rig the market to the detriment not only of the producer but also of all others engaged in legitimate transactions in various farm commodities.” 79 Cong.Rec. 8589 (June 3, 1935). Another Representative considered the bill to be directed against “the speculators who deal in large quantities,” 78 Cong.Rec. 10449 (June 4, 1935) (Remarks of Rep. Gilchrist); a third favored it to counter the activities of “15 or 20 big grain manipulators,” and noted it “will not injure but will beneficially affect legitimate dealers,” id. at 10451 (Remarks of Rep. Sabath). The Senate debates were to the same effect. The bill was designed to clip the wings of the likes of Arthur Cutten, a big grain manipulator whose activities were considered in some detail. See 80 Cong.Rec. 6160 (April 27, 1936) (Remarks of Sen. Pope). Senator Pope specifically recognized the critical role played by the typical speculator:

it is the small traders-those who take positions in the market of less than 100,000 bushels-that not only absorb the hedging sales but who furnish the real support for future trading in grains. In the main their trading is so diffused and scattered that as a body they lend a stabilizing influence. Id. at 6164.

25 . The securities cases suffice to negate the dissent’s suggestion that regulated persons may not also belong to the class for whose special benefit the regulation was enacted. Here Congress made clear that it wished to regulate “bad” speculators for the benefit of good ones, as well as hedgers and simple buyers and sellers.

26 . While the dissent chooses to characterize this as a “passing reference”, it shows the clear understanding of the writer that the Act was enacted to protect speculators and not merely hedgers.

27 . The only discordant note on the point that the CEA was intended to protect “speculators” appears to be Liang v. Hunt, 477 F.Supp. 891 (N.D.Ill.1979), a distinct minority view from which the dissent liberally quotes. The commentators have joined the courts’ nearly unanimous chorus on this point. See Bromberg & Lowenfels, supra, § 462(1) (concluding that “the commodity laws’ lack of emphasis on investors is only apparent, not real”); Note, Private Rights of Action for Commodity Futures Investors, 55 B.U.L.Rev. 804, 826 (1975) (“the statute’s clear purpose-to increase existing protection of commodity futures investors”).

28 . The House Report also contained a letter from the Department of Justice to Chairman Poage of the House Committee on Agriculture, wherein the Department representative twice cited to the recent Supreme Court decision in Deaktor, supra, 414 U.S. 113, 94 S.Ct. 466, 38 L.Ed.2d 344. The letter concerned the interrelation between exchange rules and antitrust law, and the author, discussing the doctrine of primary jurisdiction, referred to “situations where the challenged activity is alleged to violate the Commodity Exchange Act as well as antitrust laws”. H.R.Rep.No.93-975, supra, at 26 (emphasis supplied). Deaktor was cited as a case, obviously brought by a private plaintiff, which alleged violations of the CEA. Any legislator who read this should thus have been aware that private individuals could sue exchanges for violations of the CEA; they had done so in Deaktor, and the Supreme Court had merely required an initial resort to the regulatory agency for its views where these would be useful.

. The dissent chooses to make a point, footnote 16, that Chairman Poage was in error since the first decision implying a private right of action under the CEA was made in 1967 rather than 1966. We fail to see the significance of this.

29 . The point was repeated later by Representative Thone, a member of the Committee on Agriculture. See 120 Cong.Rec. 10748 (April 11, 1974) (“Some observers believe that the provision of the 1968 amendments requiring exchanges to enforce their own rules, thereby implicitly giving private parties the right to sue for nonenforcement, has had a perverse effect. To avoid risk of litigation, exchange authorities have been encouraged to reduce rather than strengthen rules designed to insure fair trading”).

30 . The reference was apparently to Case & Co., Inc. v. Board of Trade, supra, 523 F.2d 355, see p. 301 supra.

31 . The dissent relies heavily on a chart introduced during the Senate Hearings, reproduced at footnote 15, to support the conclusion that Congress did not preserve the previously recognized private right of action in 1974. The chart was not prepared by Congress, the relevant Senate committee, or even a single legislator, but rather by the committee staff. There is no suggestion that in preparing the chart the staff went beyond the explicit provisions of the CEA; the chart does not purport to deal with the broad subject of civil money “damages”, but only with the subject of civil money “penalties”. If the chart had attempted to deal with the broader subject of damages, it could have reached only one conclusion, namely, that there was an implied private right of action, since this was the unanimous view of the courts prior to the 1974 amendments.

32 . The dissent argues that none of the pre1974 cases, with the exception of Deaktor, was expressly cited to by Congress and that Congress’ failure to mention Deaktor is “highly significant” (p. 344). We fail to see why. As we have developed, there is a plethora of evidence that Congress was well aware in 1974 that courts had consistently implied private rights of action under the CEA. This fact was brought out in the House Report, congressional debate, and hearings before both houses, and was crucial to an understanding of specific aspects of the bill. In light of this it is quite irrelevant that specific case names or citations were not mentioned. In all likelihood this was simply because no one particular case was crucial. Every pre-1974 case confronting the question had found an implied right of action without limitation in the opinions to the specific relationships at issue-a result foreordained by the history of decisions under the securities laws-and Deaktor, which itself had long been foreshadowed by Baird v. Franklin, supra, 141 F.2d 238, decided nearly thirty years before, thus was not a novelty.

33 . These are FCM’s and certain persons associated with a FCM, §§ 4d, 4k; floor brokers, § 4e; and commodity trading advisors and pool operators, § 4m.

34 . See Hearings on Review of Commodity Exchange Act and Discussion of Possible Changes Before the House Committee on Agriculture, supra, at 121; Hearings on H.R. 11955 Before the House Committee on Agriculture, supra, at 123; Hearings on S. 2485, S. 2578, S. 2837, and H.R. 13113 Before the Senate Committee on Agriculture and Forestry, supra, at 317.

35 . The dissent argues, despite all these contrary indications, that the reparations procedure was designed to be the exclusive private remedy beyond informal settlement. In support of this it quotes a letter from Earl Butz, Secretary of Agriculture, published in the House Report, which states that the reparations procedure “should make possible full and equal justice for those who feel that they have been in some way damaged in the handling of their commodity accounts.” The dissent underscores this language, although it is not at all clear what about it suggests that reparations were intended to preclude private actions rather than constitute an additional remedy for aggrieved persons to whom the burden of litigation might be prohibitive. In any event it is irrelevant to our case. The plaintiffs seeking relief before us are not complaining about the handling of their accounts but rather of broad market manipulation. The dissent further stresses a passage from the House Report where it is stated that the Commission “will have original jurisdiction to consider all such complaints” which have not been resolved informally. Again, nothing in this suggests that Commission jurisdiction of reparations proceedings was meant to preclude the jurisdiction of the courts which had been widely recognized. The dissent also relies on the ceiling for civil penalties against exchanges in § 6b of $100,000, arguing that allowing private recovery for “unlimited” damages would be inconsistent with this ceiling. Penalties and damages, however, are quite different in nature. The former are punitive and some limit on the regulator’s discretion to impose them is necessary. The latter are remedial and naturally limited to the loss caused by the defendant. Further, the dissent’s argument proves too much. There is a limit of $100,000 on the fines which can be imposed on a FCM under § 6(b), but the FCM’s are subject to “unlimited” private recovery in reparations. Congress obviously saw no inconsistency between allowing recovery for actual damages and limiting fines. Finally the dissent states that under § 6b fines against exchanges are limited to “an amount which will not ‘materially impair the contract markets’ ability to carry on its operations and duties.’ ” P. 349. Rather the CFTC is required to consider whether a fine will have this effect; the only ceiling in § 6b is the $100,000 maximum, which, incidentally, is not an “overall” limitation as the dissent states but rather a limit per violation. (For example, each day of failure to comply with a cease and desist order is a separate violation, § 6b). Concern for an FCM’s ability to carry on business is specifically required to be considered in § 6(d), yet FCM’s are subject to full damages in reparations.

36 . Plaintiffs do not seek to base their right of action on this jurisdictional provision, but rather point to it as evidencing a congressional concern to preserve existing rights of action. Appellees’ criticism, derived from Touche Ross & Co. v. Redington, supra, 442 U.S. at 577, 99 S.Ct. at 2489; that plaintiffs’ rights must be found in substantive and not jurisdictional provisions, is therefore inapt.

37 . See also testimony of Deputy Assistant Attorney General Clearwater of the Antitrust Division, id. at 663, to which Chairman Talmadge responded: “I have read your statement in its entirety, and I doubt that this committee, and I doubt the House had in mind depriving either Federal courts or [sic] jurisdiction in antitrust matters, or any other matter, and certainly not State courts.” !d. at 664 (emphasis supplied).

38 . Defendants and the dissent suggest that the failure to enact these bills is evidence of legislative intent to repeal the private right of action. This suggestion is unpersuasive. None of the bills provided a simple private right of action for actual damages. Rather, two of the proposals, H.R. 11195 and S. 2378, would have expanded the previously judicially recognized right of action by providing for treble damages for any violation; and one bill, S. 2837, provided treble damages for a willful violation and actual damages for nonwillful violations. The dissent’s argument that it would have been simple to change the bills so as to eliminate the provision for treble damages ignores that trebling was what the proposers wanted. Simple damages were recoverable under existing law. We have not “ignored” the discussion in the Amtrak case, 414 U.S. at 461, 94 S.Ct. at 694, as the dissent charges, p. 345, where Congress failed to adopt an amendment that would have altered the interpretation which the Secretary of Transportation had placed on the proposed act. It is simply inapposite.

39 . We find little relevance in T.I.M.E., Inc. v. United States, 359 U.S. 464, 79 S.Ct. 904, 3 L.Ed.2d 952 (1959), on which the dissent heavily relies. There Congress had deliberately withheld from the I.C.C. the power to award reparations for past unreasonable motor carrier rates, in sharp contrast to what it had done with regard to rail and water rates. The issue was whether a shipper could circumvent the congressional policy by suit in the courts, although the Abilene doctrine, Texas & Pacific R. R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553 (1907), would require the courts to refer the issue of reasonableness to the Commission. The Court concluded, although by the narrowest margin, that “It would be anomalous to hold that Congress intended that the sole effect of the omission of reparations provisions in the Motor Carrier Act would be to require the shipper to bring two lawsuits instead of one, with the parties required to file their complaint and answer in a court of competent jurisdiction and then immediately proceed to the l.C.C. to litigate what would ordinarily be the sole controversial issue in the suit”, 359 U.S. at 474, 79 S.Ct. at 910-although some commission cases and two district court cases which had given only “cursory attention” to the problem had held this might be done. Unlike the 1974 amendments to the CEA, there had been no comprehensive revision of the Motor Carrier Act after consistent judicial interpretation that it did permit reparations suits. The only communication of the Commission’s views to Congress was in connection with a request that it be given reparations authority, on which Congress had not acted. In our case Congress deliberately left in place a series of eleven thoroughly considered decisions, in line with Supreme Court decisions in a closely related field, stretching out over seven years. Moreover, on the very point that concerned the Supreme Court in T.I.M.E., Inc., namely, that the Abilene doctrine would involve the agency in an area where Congress had denied it power and thus circumvent congressional policy, there is no such conflict here. Indeed, the Supreme Court had ruled in Deaktor before the 1974 amendments were enacted that in a suit on an implied cause of action under the CEA, the court should stay the action pending resort to the agency if this seemed desirable to preserve uniformity.

40 . Requiring states to proceed in federal court and to notify the FCTC does not demonstrate that the 1978 Congress intended to eliminate the private suit for damages which had been recognized by its predecessors four years previously. The states were expected to act largely in an enforcement role, much as did the FCTC; moreover it would be incongruous to allow a state to proceed as parens patriae in its own courts for a violation of federal law. Sufficient means to obtain uniformity in private litigation were afforded by the controlling effect of federal law in all CEA litigation and the possibility of referral to the CFTC approved by the Supreme Court in Deaktor. Beyond this the dissent’s reliance on such a slender reed as the inference to be drawn from the 1978 Congress’ having required parens patriae suits to be brought in federal courts with prior notice to the CFTC is a prime example of the unreliability frequently noted by the Supreme Court-of relying on the thinking of a later Congress as a guide to the intentions of a former one.

41 . The list of CEA protections in the 1978 Senate Report, S.R.No.95-980, supra at 12-13, which the dissent, note 25, sees as indicative of a congressional belief that no private right of action existed, included only those protections expressly provided by the CEA, and is not at all inconsistent with the view, clearly held by the 1974 Congress, that other judicially implied protections existed. See Navigator Group Funds, supra, note 19, at 423.

42 . The plaintiffs in the consolidated actions before us include both persons who traded through agents, who would be within this example, and persons who traded directly for their own account. See National Super Spuds, Inc. v. NYME, 77 F.R.D. 361, 370 (S.D.N.Y. 1977). It is not clear in every case, however, which plaintiffs fall within which group.