## Facts

- The CFTC alleged that William C. Dunn and Delta Consultants, Inc. solicited customer funds for foreign currency options trading and operated a fraudulent investment scheme.
- The options were executed in the over-the-counter market through direct contracts with international banks and others, not on a regulated exchange or board of trade.
- Customers did not receive sold options directly; the firm tracked customer positions internally and issued weekly reports.
- The trading resulted in heavy losses for both petitioners and their customers.
- Petitioners argued the Treasury Amendment to the Commodity Exchange Act exempted their off-exchange foreign currency options transactions from CFTC jurisdiction.

## Issues

1. Whether the Treasury Amendment’s exclusion for “transactions in foreign currency” exempts off-exchange foreign currency options from regulation under the Commodity Exchange Act.
2. Whether the CFTC had statutory authority to regulate petitioners’ off-exchange foreign currency options activities.

## Decision

- The Supreme Court reversed the Second Circuit and remanded.
- The Court held that the Treasury Amendment exempts off-exchange trading in foreign currency options from CFTC regulation, so long as the transactions are not conducted on a board of trade.
- The Court interpreted “transactions in foreign currency” to include options, rejecting the CFTC’s attempt to limit the phrase to spot currency trades or to distinguish options from futures.
- The Court reasoned that a narrow reading would conflict with ordinary usage of “in,” undermine Congress’s apparent intent to exempt off-exchange foreign currency futures, and render the Treasury Amendment largely surplusage given the CEA’s general focus on futures-type regulation.
- The Court found legislative history did not support the CFTC’s futures/options distinction and stated that policy arguments for regulating off-exchange foreign currency options were for Congress, not the courts.
- Justice Scalia concurred in the judgment, agreeing with the textual conclusion while expressing skepticism about reliance on legislative history.

## Legal Principles

- Under the Treasury Amendment, “transactions in foreign currency” includes off-exchange foreign currency options.
- The CFTC lacks authority under the Commodity Exchange Act to regulate off-exchange foreign currency options that fall within the Treasury Amendment’s exclusion, absent application of the statutory proviso for transactions conducted on a board of trade.
- Statutory interpretation favors ordinary meaning and structural coherence, and disfavors readings that make enacted language superfluous.
- Courts will not revise a statute’s scope based on policy concerns where the text and structure indicate Congress chose a different regulatory line.

## Conclusion

The Court held that the Treasury Amendment removes off-exchange foreign currency options from the CFTC’s regulatory authority, reversing the lower court’s contrary interpretation and leaving any expansion of regulation in this area to Congress.


Dunn v. Commodity Futures Trading Comm’n, 519 U.S. 465 (1997)