## Facts

- Ikon Global Markets, Inc. was a registered futures commission merchant and member of the National Futures Association (NFA), subject to Commodity Futures Trading Commission (CFTC) regulation under the Commodity Exchange Act (CEA).
- NFA rules restricted certain offsetting foreign-exchange accounts; Ikon closed customer currency positions believing the NFA rule required it.
- Two customers filed separate NFA arbitrations in 2009 challenging Ikon’s actions; Ikon won one arbitration and lost the other.
- Ikon alleged the inconsistent outcomes showed the NFA arbitration process was fundamentally unfair.
- Ikon sued the CFTC under the Administrative Procedure Act (APA), claiming the CEA required the CFTC to supervise NFA arbitrations to ensure fairness and consistency.
- Ikon sought orders compelling the CFTC to oversee or review NFA arbitrations and to nullify both arbitration awards (including the favorable one).
- The CFTC moved to dismiss for lack of standing and for failure to state a claim, arguing no statute or regulation required CFTC review of NFA arbitration awards.

## Issues

1. Whether Ikon had Article III and prudential standing, and whether the court had subject-matter jurisdiction over an APA challenge to the CFTC’s approach to NFA arbitration.
2. Whether the CEA and CFTC regulations impose a legally enforceable duty on the CFTC to review, supervise, or overturn NFA arbitration decisions.
3. Whether the CFTC’s refusal to intervene in NFA arbitration constitutes agency action “unlawfully withheld” or “arbitrary and capricious” under the APA.

## Decision

- The court held Ikon had standing and that jurisdiction existed to hear the APA claims.
- The court granted the CFTC’s Rule 12(b)(6) motion and dismissed the complaint for failure to state a claim.
- The court held the CEA and implementing regulations did not require the CFTC to review or supervise NFA arbitration awards, and the APA could not be used to compel such oversight or to nullify the awards.
- The dismissal was with prejudice.

## Legal Principles

- APA § 706(1) permits a court to compel only a discrete agency action that the agency is legally required to take; courts cannot impose supervisory duties absent a statutory or regulatory command.
- A statutory requirement that an agency approve an arbitration framework providing “fair and equitable” procedures does not, without more, create a duty to review individual arbitration awards.
- Where regulations and approved association rules make arbitration awards final and non-appealable within the regulatory scheme, disappointed parties cannot use the APA to obtain de facto appellate review through the agency.
- Inconsistent results across separate arbitrations do not, by themselves, establish illegality or create an enforceable obligation for the regulator to provide award-by-award oversight.

## Conclusion

The court ruled that, although Ikon could sue and the court could hear the case, Ikon failed to identify any CEA or regulatory provision requiring the CFTC to review or overturn NFA arbitration awards; therefore, the APA provided no basis to compel CFTC intervention or to nullify the arbitral outcomes.


Ikon Glob. Mkts., Inc. v. CFTC, 859 F. Supp. 2d 162 (D.D.C. 2012)