Futures, Derivatives and Commodities Litigation 101

commodities lawyers

Cases of fraudulent activities and manipulation in the commodities futures markets have increased drastically over the last three years. The volume of federal securities fraud class action filings in 2019 reported near-record highs. The plaintiffs filed 428 federal securities fraud class action suits, surpassing 2017’s record high of 413. The high volatility within the markets leaves open channels that dubious cons use to scam their investor clients.

Futures, Derivatives and Commodities Lawyers

Commodities futures trading involves the buying and selling of commodity contracts for the purchase of the goods in the future. Some of the commodities traded within the markets include agricultural products, precious metals, and oil. The contract sales are highly unpredictable, with a higher risk of loss on investments made. These lucrative deals leave investors susceptible to fraud and manipulation by cons within the industry. Commodities lawyers can help you navigate through futures and derivatives issues concerning your trades and investment.

US Commodities Futures Trading Commission

The Commodities Exchange Act (CEA) passed by congress in 1936 provides regulation of all commodities and futures trading activities in the United States. The CEA provides the statutory framework that establishes the mandate of the US Commodities Futures Trading Commission (CFTC). Under the act, CFTC offers regulatory guidelines that control the futures and derivatives markets.

The aftermath of the 2008 financial crises established that fraud in swap markets played a critical role in the global market crash. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 expanded CFTC’s mandate over swap trading. It also established a whistleblowers program that allows citizens to file reports of fraudulent activities in the futures markets. Commodities litigation services may help you file your complaint with the CFTC.

CFTC Division of Enforcement

The commission investigates the violations of the CEA and other CFTC regulations in the futures and swap markets. The increase in online demand for commodities and derivatives has caused cases of fraud to spike. Some of the violations are:

1. Fraud: This may include illegal solicitation, fund misappropriation, false account statements, and Ponzi schemes.

2. Market Manipulation: Such as non-competitive transactions, spoofing, and fraudulent trading practices to manipulate prices.

3. Trade practice violations: Involves unauthorized swap transactions, mismanagement of client funds, false trade information, and the use of non-competitive transactions.

If you suspect any fraudulent behavior, it’s prudent to seek legal counsel from knowledgeable commodities lawyers. The commodity litigants will help you lodge a case against the scammers through the CFTC.

What Can Commodities Lawyers do For You?

1. Litigation

Commercial litigation lawyers can represent you in a civil court against the perpetrators. Commodity lawyers usually review your complaint and contracts against the Commodities Exchange Act and other CFC regulations and establish the claim before proceeding to court. Extensive knowledge of futures and securities law is necessary for adequate representation.

2. Arbitration

Most filings are handled through an out-of-court settlement filed in court. The commodities lawyer can offer objective legal advice throughout the process to ensure your rights are protected. The advocate will help you fill out the necessary legal paperwork as you report the case to the CFTC.


Frauds, manipulations, and scams in the commodities and futures markets are on the rise. The whistleblower program under the CFTC may help you file a legal complaint against the scammers. Commodities lawyers can guide you through the filing process and even represent you in court or arbitration.

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