Clifford Chance
Defending Against U.S. Trading-Related Investigations and Litigations: The Second Circuit's Narrowing View of the CEA's Extraterritorial Application
July 7, 2021
On June 22, 2021, the Second Circuit Court of Appeals issued its latest ruling recognizing limits on the scope and reach of the Commodity Exchange Act. The Second Circuit had previously applied the Supreme Court’s holding in Morrison v. National Australia Bank to the Commodity Exchange Act, holding that any
application of that statute would be impermissibly extraterritorial unless predicated upon domestic “misconduct.” And on June 22, the court clarified that, with respect to futures trading, even domestic misconduct would not suffice unless the futures contracts in question trades on, or subject to the rules of, a futures exchange registered with the U.S. Commodity Futures Trading Commission. The holding provides further suggestion that persons defending futures actions involving non-U.S. exchanges may be able to obtain early and efficient resolutions to their matters.
