On July 21, 2025, a Texas district court in Commodity Futures Trading Commission et al. v. TMTE Inc et al., a $185 million fraud suit filed by the Commodity Futures Trading Commission (CFTC) and 30 state attorneys general against two defendant precious metals dealers. While the overall case involves the alleged sale of gold and silver bullion to investors at inflated prices, the order is most notable for its narrow view of the CFTC’s jurisdiction under the Commodity Exchange Act (CEA).
Background
In September 2020, the CFTC and 30 state regulators filed a against two California precious metals dealers, Lucas Asher and Simon Batashvili, accusing them of fraudulently inducing investors nationwide to purchase hugely overpriced gold and silver bullion. When it was filed, the case represented the largest-ever joint filing between the CFTC and state regulators. Because many of the targeted investors were elderly, the $185 million in customer funds obtained by Asher and Batashvili is estimated to include over $140 million in retirement savings. The CFTC and state attorneys general seek disgorgement, civil monetary penalties, and restitution, as well as lifetime registration and trading bans for the defendants and a permanent injunction against any further violations of the CEA, state laws, or CFTC regulations as charged.
The CEA gives the CFTC broad regulatory jurisdiction, including antifraud authority, over commodity futures. The CFTC has long interpreted that jurisdiction to include regulating markets for precious metals such as gold, copper, and silver. In addition to civil enforcement actions such as the case against Asher and Batashvili, the CFTC has exercised this authority by price manipulation of the gold and silver markets and issuing on precious metals fraud scams.
However, the recent opinion from Judge Brantley Starr of the U.S. District Court for the Northern District of Texas suggests the CFTC may not have the power to regulate gold and silver bullion sales in some instances.
Gold and silver as commodities
The defendants primarily argued that gold and silver bullion are not commodities as the word is defined in the CEA. Judge Starr agreed, writing that the CEA provides limited grounds to argue that the CFTC has the power to regulate gold and silver. Section 1a(9) of the CEA lists 25 specific agricultural commodities such as livestock and corn, but also includes a catchall stating that commodities comprise “all other goods and articles...in which contracts for future delivery are presently or in the future dealt in.” While the CFTC has for decades utilized the catchall to flex its authority over novel types of commodity futures, Judge Starr argued that “all other goods and articles” should be limited to agricultural items.
Judge Starr’s opinion is highly textualist, meaning his interpretation of Section 1a(9) focuses on the literal meaning of the provision as written, rather than relying on the CEA’s purpose or history or the intent of its drafters. He employed a Latin canon of statutory interpretation called ejusdem generis—a trademark of textualism—indicating that a general term (in this case, “all other goods and articles”) following a list of specific examples (here, agricultural products) should be limited to the same class. Judge Starr also pointed out that, when Congress revised Section 1a(9) in 2010 to carve out movie tickets, the provision was not otherwise changed. Therefore, “section 1 does not encompass precious metals as commodities because they are neither agricultural products nor movie tickets.”
Notably, a different provision of the CEA mentions gold and silver: Section 19 addresses gold, silver, and platinum in reference to standardized contracts. The court declined to analyze the applicability of Section 19 at the summary judgment stage, citing insufficient briefing by the parties, and instead chose to deny both sides’ motions.
What this means to you
Judge Starr’s reading of the definition of “commodity” is an exceptionally narrow one. A district court previously held that the CFTC’s authority did not reach precious metals sales, but that decision was . Additionally, Judge Starr’s interpretation of Section 1a(9) could be applied to strip the CFTC of jurisdiction over certain commodity futures markets beyond just gold and silver. Importantly, however, Judge Starr’s view represents a stark departure from precedent. Other federal courts have read Section 1a(9) more broadly and allowed the CFTC to regulate non-agricultural assets as commodities. This includes , which are currently a significant area of enforcement for the CFTC.
CFTC v. TMTE Inc. is currently set for trial in October 2025. This case is one to watch for the commodities industry, as the CFTC certainly will raise additional arguments to assert its enforcement authority over the precious metals industry.
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