## Facts

- The Commodity Futures Trading Commission (CFTC) set speculative position limits in soybean futures to prevent excessive speculation, including a 3-million-bushel limit applicable to aggregated accounts under CFTC rules.
- Nelson Bunker Hunt and William Herbert Hunt traded large soybean futures positions through coordinated accounts, often using the same broker, trading on the same days, in nearly identical quantities and prices.
- Hunt-controlled personnel tracked positions on a combined basis rather than as independent, unrelated accounts.
- In early 1977, the Hunts placed trades through accounts opened in the names of their children; the accounts were funded by the Hunts, and the children lacked funds and did not meaningfully control the trading.
- When aggregated, the family’s positions greatly exceeded the 3-million-bushel limit across multiple delivery months.
- The CFTC filed a civil enforcement action under the Commodity Exchange Act (CEA), seeking injunctions, liquidation of excess positions, and disgorgement of profits.
- The district court found a position-limit violation but denied injunctive relief and declined to order liquidation or disgorgement.
- The CFTC publicly disclosed the Hunts’ soybean positions under CEA § 8a(6); the Hunts sought to stop further disclosure and asserted damages counterclaims against the agency and employees.

## Issues

1. Whether the Hunts’ related accounts, including children’s accounts funded and directed by the Hunts, should be aggregated for purposes of CFTC soybean position limits.
2. Whether the district court abused its discretion by denying injunctive relief, including prospective restraints and liquidation of positions exceeding lawful limits, after finding a violation.
3. Whether disgorgement of profits is available as ancillary equitable relief in a CFTC enforcement action under CEA § 13a-1.
4. Whether the CFTC’s public disclosure of the Hunts’ positions under CEA § 8a(6) was lawful, and whether the Hunts could obtain damages or injunctive relief against the CFTC in this enforcement action.

## Decision

- The Seventh Circuit affirmed the finding that the Hunts violated CFTC position limits once the related accounts were properly aggregated.
- The court reversed the denial of effective injunctive relief and remanded for the district court to enter appropriate prospective orders, including relief addressing excess positions.
- The court held that ancillary equitable relief, including disgorgement, was within the district court’s equitable power in a § 13a-1 enforcement action and could be considered on remand.
- The court rejected challenges to the CFTC’s statutory authority to disclose the Hunts’ positions under § 8a(6) and rejected the Hunts’ efforts to pursue damages and related counter-relief against the agency and its personnel in this posture.

## Legal Principles

- CFTC speculative position limits may be enforced by aggregating accounts that, in substance, are commonly controlled or used in concert, including accounts nominally held by family members but funded and directed by another.
- Position-limit rules are preventive; proof of intent to manipulate prices is not required to establish a violation of limits adopted to prevent excessive speculation.
- After a demonstrated violation and a reasonable likelihood of recurrence, a district court should provide meaningful equitable relief to prevent future violations; denying all effective injunctive relief may constitute an abuse of discretion.
- In an enforcement action invoking a federal court’s equitable jurisdiction under CEA § 13a-1, the court may order ancillary equitable relief, including disgorgement, to deprive violators of gains from unlawful conduct and to deter repetition.
- CEA § 8a(6) authorizes the CFTC to publicly disclose trading positions in the exercise of its regulatory functions, and defendants generally may not convert an enforcement action into a damages suit against the agency and its officials.

## Conclusion

The Seventh Circuit held that the Hunts’ soybean futures positions were properly aggregated and exceeded CFTC limits, and it required the district court to impose effective equitable remedies on remand, including injunctive relief and potential disgorgement, while upholding the CFTC’s statutory authority to disclose the positions and rejecting damages counterclaims in the enforcement proceeding.


Commodity Futures Trading Comm’n v. Hunt, 591 F.2d 1211 (7th Cir. 1979)