Petition to Review

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7^th Circuit Court of Appeals

Case Name: Dirk L. Witter v. Commodity Futures Trading Commission

Case No.: 15-3535

Officials: WOOD, Chief Judge, and ROVNER and HAMILTON, Circuit Judges

Focus: Petition to Review

Commission’s conclusion that TransAct acted in accordance with federal regulations and wre not required to record conversations was supported by sound evidence.

“Witter’s legal and factual contentions are both wrong. TransAct had no duty to record the call between Witter and Skelton. Federal regulations require that, before buying or selling a commodity, a merchant such as TransAct must receive either “specific authorization” (the “precise commodity interest to be purchased or sold” and the “exact amount” of that interest) or “authorization in writing.” 17 C.F.R. § 166.2. No regulation requires the merchant to record phone calls to cancel previously authorized orders to buy or sell. Nor did TransAct’s customer agreement include any such requirement. The agreement says only that the customer gives TransAct permission to record calls, not that the company must do so. Moreover, although evidence showed that TransAct was capable of recording—and sometimes did record—multiple calls directed to a single handset, that evidence did not require a finding that Witter’s call to Skelton was recorded. The judgment officer could reasonably rely on the evidence that TransAct redirected some calls from one handset to another, non-recording line, to conclude that Witter’s was one of those calls. The judgment officer thus did not err in declining to draw an adverse inference from the missing recording.”

Petition for review denied

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.