## Facts

- Mass Media Marketing, Inc. and Commodity Referral Service, Inc. (collectively, Mass Media) were Florida advertising and marketing companies; Rolando Nanasca was an officer/director and the president.
- In 1995, Mass Media began making 60‑second commercials and 30‑minute infomercials aimed at the commodity futures/options market.
- The advertisements were typically written by Nanasca, who was not registered with the Commodity Futures Trading Commission (CFTC) and lacked specialized training in commodity trading.
- The ads claimed commodity futures/options could offer legitimate opportunities for investors to double, triple, or quadruple their money and invited viewers with at least $5,000 to invest to call a toll‑free number for more information.
- When viewers called, an answering service (or operators) asked what the caller was calling about; if the call related to a commodities ad, the operator gave a short description and collected the caller’s name, address, and phone number to create a “lead.”
- Mass Media sold leads to CFTC‑registered introducing brokers on a per‑lead basis; Mass Media’s compensation depended on the number of leads sold, not on whether any caller ultimately placed an order or entered a transaction.
- Mass Media ran two kinds of campaigns:
  - **Sponsored ads:** a specific registered introducing broker’s name appeared in the ad; leads were sold to that broker under a lead‑purchase arrangement (with possible resale of excess leads).
  - **Non‑sponsored (blind) ads:** no broker was identified; leads could be sold to any introducing broker willing to buy them.
- In 1997, after learning the National Futures Association (NFA) disfavored blind advertising that did not identify a registered firm, Mass Media stopped blind ads but continued sponsored ads.
- The CFTC sued in the Southern District of Florida, asserting Mass Media acted as an unregistered introducing broker in violation of the Commodity Exchange Act (CEA).
- The case came before the district court on cross‑motions for summary judgment (and/or judgment on the pleadings) focused on whether Mass Media fell within the CEA’s “introducing broker” definition.

## Issues

1. Whether companies that create commodity options/futures advertisements, collect caller contact information, and sell leads to registered introducing brokers are “introducing brokers” because they are “engaged in soliciting or in accepting orders” under the CEA.

## Decision

- The court held Mass Media was **not** an “introducing broker” as a matter of law because its activities amounted to general advertising and lead generation, not soliciting or accepting customer orders for commodity futures/options.
- The court **granted** defendants’ motion for summary judgment (to the extent it sought judgment on the introducing‑broker claims) and **denied** the CFTC’s motion for partial summary judgment on that issue.

## Legal Principles

- “Introducing broker” status under the CEA turns on whether the person is **engaged in soliciting or accepting orders** for commodity futures or options for others, not merely generating interest through media advertising.
- Collecting contact information from callers and selling that information to registered brokers, without taking orders or participating in transactions, is not enough to trigger introducing‑broker registration duties.
- A compensation structure based on **per‑lead** payments (rather than commissions tied to executed trades) supports treating the actor as an advertising/lead business rather than an order‑soliciting intermediary.
- Courts applying the CEA’s registration categories focus on the statute’s functional requirements (order solicitation/acceptance) and will not expand those categories to cover upstream advertising services that stop short of order activity.

## Conclusion

The court concluded that Mass Media’s commodity‑related commercials, toll‑free call intake, and sale of caller “leads” to registered introducing brokers did not constitute soliciting or accepting commodity options/futures orders, so Mass Media was not an “introducing broker” required to register under the CEA, and the CFTC could not obtain summary judgment on that registration theory.


CFTC v. Mass Media Marketing, Inc., 156 F. Supp. 2d 1323 (2001)