The Commodity Futures Trading Commission has appealed the ruling of a Chicago federal court judge in the Hunt family soybean case - although the two-year-old commission cites the case as its most resounding victory to date, it wants to be able to prevent further violations.
CFTC lawyers filed the appeal Friday to the 7th Circuit U.S. Court of Appeals, according to an agency spokesman.
On Sept. 28 U.S. District Court Judge Frank McGarr held that the oil-rich Hunt family of Texas had violated speculative trading limits on soybean futures holdings, but he imposed no penalties.
The CFTC brought the action against seven members of the Hunt family and a family-operated company in April, alleging that their holdings in the May and June soybean futures contracts on the Chicago Board of Trade exceed the 3 million bushel limit. The agency argued that the eight were "trading in concert" according to a plan and could not trade up to 3 million bushels individually as a result.
Judge McGarr denied the CFTC's request for an injunction barring the Hunts from future violations of the limits and for disgorgement of profits illegally made from the trading pattern between January and April.
His opinion, in effect said the [WORD ILLEGIBLE] for injunctions had been eliminated by the expiration of the May and June soybean contracts in Chicago and that the compatation of the Hunts' profits would be too complicated to order disgorgement.
"We're asking the appeals court to set some good law." CFTC chairman William T. Bagley said yesterday. "We won the case. We do consider it a victory, but we need a injunction against future violations so we can take immediate action in case it happens again, as well as to provide a precedent against others."
The appeal also asks that the case be continued because evidence was not taken at the trial level on the profits question and disgorgement.
While estimates of the Hunts' gains from their soybean trading in the first half of this year ranged between $20 million and $100 million, the soybean futures market spun into a downturn during the summer months. At this point, it is unclear what if any, profits they made, CFTC staff members said.