SCOTUS asked to reject CFTC’s proximate cause theory and authority to impose lifetime industry bans

By Brad Rosen, J.D.Precious metals dealer Southern Trust Metals, Loreley Overseas Corporation, an overseas affiliate, and its principal Robert Escobio, in a petition for writ of certiorari, are asking the United States Supreme Court to overturn an Eleventh Circuit ruling that adopted the CFTC’s position with regard to its fraud determination and sanctions. In particular, the petitioners contend that the appellate court erred by deciding that foreseeability and reliance alone, absent any finding of loss causation are sufficient to establish proximate cause. Additionally, the petitioners are asking the high court to overturn lifetime industry bans, arguing that such injunctions constitute penalties which are unconstitutional in violation of separation-of-powers principles (Southern Trust Metals, Inc. v. CFTC, February 15, 2019).District court ruling. The federal court for the Southern District of Florida found in favor of the CFTC that the corporate defendants and its…

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