2007 Oregon Code - Chapter 645 :: TITLE 50
TITLE 50
TRADE
REGULATIONS AND PRACTICES
Chapter 645. Commodity Transactions
646. Trade Practices and Antitrust Regulation
646A. Trade Regulation
647. Trademarks and Service Marks; Music
Royalties
648. Assumed Business Names
649. Insignia and Names of Organizations
650. Franchise Transactions
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Chapter 645
Commodity Transactions
2007 EDITION
COMMODITY TRANSACTIONS
TRADE REGULATIONS AND PRACTICES
GENERAL PROVISIONS
645.005 Definitions
645.010 Commodity
contract or option transactions prohibited; exception
645.015 Persons
exempt from prohibition; effect of federal law
645.020 Transactions
exempt from prohibition
645.025 Applicability
of ORS 645.010, 645.035 and 645.040
645.030 When
transactions are considered to occur in this state
645.035 Commodity
merchant required to comply with federal law
645.040 False,
fraudulent or deceptive trading practices prohibited; business liable for acts
or omissions of agents or employees; effect of federal law
ADMINISTRATION
645.200 General
authority to administer chapter
645.205 Rules
645.210 Investigatory
power; compliance with subpoenas
645.215 Notice
of orders; hearing
645.220 Appeal
of order; modification of order
645.225 Action
to compel compliance with rule or order; attorney fees; claim; disposition of
recovery
645.230 Allegations
of complaint; burden of proof
MISCELLANEOUS
645.300 Good
faith actions not subject to liability
645.305 Jurisdiction
of courts
645.310 Construction
of chapter; purpose
645.315 Short
title
645.320 Effect
of chapter on Oregon Securities Law
PENALTIES
645.950 Civil
penalty
645.990 Criminal
penalty
GENERAL PROVISIONS
645.005
Definitions. As used in this
chapter:
(1) Board of trade means any person or
persons engaged in buying or selling any commodity or receiving the same for
sale on consignment, whether such person or persons are characterized as a
board of trade, exchange or other form of marketplace.
(2) Commodity means, except as otherwise
specified by the director by rule, all goods, articles, products, foreign
currency or items of any kind. Commodity does not include real property or
any timber, agricultural or livestock product grown or raised on real property
and offered or sold by the owner or lessee of such real property.
(3) Commodity contract:
(a) Means any account, agreement or
contract for the purchase or sale of one or more commodities, however
characterized, which is primarily for speculation or investment purposes and
not for use or consumption by the offeree or purchaser or between persons
engaged in producing, processing, using commercially or handling as merchants
the commodity or any by-product thereof. Any contract for one or more
commodities offered or sold shall, in the absence of evidence to the contrary,
be presumed to be offered or sold for speculation or investment purposes; and
(b) Does not include any contract or
agreement which requires, and under which the purchaser receives within 28 days
of payment of any portion of the purchase price, physical delivery of the total
amount of each commodity to be purchased under the contract or agreement.
(4) Commodity merchant means any person,
other than a futures association, required to register with the Commodity
Futures Trading Commission.
(5) Commodity option:
(a) Means any account, agreement or
contract giving a party thereto the right but not the obligation to purchase or
sell one or more commodities or one or more commodity contracts, whether
characterized as an option, privilege, indemnity, bid, offer, put, call,
advance guaranty, decline guaranty or otherwise; and
(b) Does not include an option traded on a
national securities exchange registered with the federal Securities and
Exchange Commission.
(6) Director means the Director of the
Department of Consumer and Business Services or an agent or employee authorized
to act on the directors behalf.
(7) Financial institution means an
insured institution or trust company as those terms are defined in ORS 706.008.
(8) Fraud, deceit and defraud are
not limited to common-law deceit.
(9) Offer includes every offer to sell,
offer to purchase or offer to enter into a commodity contract or commodity
option.
(10) Person includes an individual, a
joint venture, a partnership, a cooperative, an association, a joint stock
company, a corporation, a trust, an unincorporated organization, a government
or a political subdivision of a government.
(11)
645.010
Commodity contract or option transactions prohibited; exception. Except as otherwise provided in ORS 645.015
or 645.020:
(1) No person shall sell or purchase or
offer to sell or purchase any commodity under any commodity contract or under
any commodity option or offer to enter into or enter into as seller or
purchaser any commodity contract or any commodity option.
(2) No person shall participate or
materially aid another person to commit an act or otherwise engage in a
transaction prohibited by subsection (1) of this section. [1987 c.148 §4; 1989
c.179 §2]
645.015
Persons exempt from prohibition; effect of federal law. (1) The prohibitions in ORS 645.010 shall
not apply to any transaction by:
(a) A person registered with the federal
Commodity Futures Trading Commission as a futures commission merchant or as a
leverage transaction merchant whose activities require registration;
(b) A person affiliated with, and whose
obligations and liabilities under the transaction are guaranteed by, a person
referred to in paragraph (a) of this subsection;
(c) A person who is a member of a contract
market designated by the federal Commodity Futures Trading Commission or any
clearinghouse thereof;
(d) A financial institution;
(e) A person registered under the Oregon
Securities Law, as cited in ORS 59.005, as a broker-dealer; or
(f) A contract market designated by the
federal Commodity Futures Trading Commission or any clearinghouse thereof or a
securities exchange registered with the federal Securities and Exchange
Commission.
(2) The exemption provided by this section
shall not apply to any transaction or activity which is prohibited by the
federal Commodity Exchange Act or rules adopted by the federal Commodity Futures
Trading Commission. [1987 c.148 §5]
645.020
Transactions exempt from prohibition. The prohibitions in ORS 645.010 shall not apply to the following:
(1) An account, agreement or transaction
within the exclusive jurisdiction of the federal Commodity Futures Trading
Commission;
(2) A commodity contract for silver, gold,
platinum, palladium, copper or other precious metal as defined by rule of the
director whether in coin, bullion or other form if within seven days from the
payment of any portion of the purchase price:
(a) The precious metals purchased are
delivered to and held on the purchasers behalf at a depository not affiliated
with the seller which is:
(A) A financial institution;
(B) A depository the warehouse receipts of
which are recognized for delivery purposes for any commodity on a contract
market designated by the federal Commodity Futures Trading Commission;
(C) A storage facility licensed or
regulated by the
(D) A depository designated by rule of the
director; and
(b) Unless otherwise provided by rule of
the director, the depository issues and the purchaser receives an instrument
evidencing that such quantity of precious metals has been delivered to the
depository on the purchasers behalf; and
(3) A commodity contract under which the
offeree or the purchaser is a person referred to in ORS 645.015, an insurance
company or an investment company as defined in the federal Investment Company
Act of 1940, as amended. [1987 c.148 §6; 1989 c.179 §3; 1997 c.249 §195]
645.025
Applicability of ORS 645.010, 645.035 and 645.040. (1) ORS 645.010, 645.035 and 645.040 apply
to persons who sell or offer to sell when:
(a) An offer to sell is made in this
state; or
(b) An offer to buy is made and accepted
in this state.
(2) ORS 645.010, 645.035 and 645.040 apply
to persons who buy or offer to buy when:
(a) An offer to buy is made in this state;
or
(b) An offer to sell is made and accepted
in this state. [1987 c.148 §19]
645.030
When transactions are considered to occur in this state. (1) For the purpose of ORS 645.025, an offer
to sell or to buy is made in this state, whether or not either party is then
present in this state, when the offer:
(a) Originates from this state; or
(b) Is directed by the offeror to this
state and received at the place to which it is directed or at any post office
in this state in the case of a mailed offer.
(2)(a) For the purpose of ORS 645.025, an
offer to buy or sell is accepted in this state when acceptance:
(A) Is communicated to the offeror in this
state; and
(B) Has not previously been communicated
to the offeror, orally or in writing, outside this state.
(b) Acceptance is communicated to the
offeror in this state, whether or not either party is then present in this state
when the offeree directs it to the offeror in this state reasonably believing
the offeror to be in this state and it is received at the place to which it is
directed or at any post office in this state in the case of a mailed
acceptance. [1987 c.148 §20]
645.035
Commodity merchant required to comply with federal law. (1) No person shall engage in a trade or
business or otherwise act as a commodity merchant unless such person:
(a) Is registered or temporarily licensed
with the federal Commodity Futures Trading Commission for each activity
constituting such person as a commodity merchant; or
(b) Is exempt from such registration by
virtue of the federal Commodity Exchange Act or rules adopted by the federal
Commodity Futures Trading Commission.
(2) No board of trade shall trade, or
provide a place for the trading of, any commodity contract or commodity option
required to be traded on or subject to the rules of a contract market
designated by the federal Commodity Futures Trading Commission unless such board
of trade is so designated for such commodity contract or commodity option. [1987
c.148 §7]
645.040
False, fraudulent or deceptive trading practices prohibited; business liable
for acts or omissions of agents or employees; effect of federal law. (1) It is unlawful for any person, directly
or indirectly, in connection with a commodity contract or commodity option:
(a) To employ any device, scheme or
artifice to defraud;
(b) To make any false report, enter any
false record or make any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading;
(c) To engage in any transaction, act,
practice or course of business which operates or would operate as a fraud or
deceit upon any person; or
(d) To misappropriate or convert the
funds, security or property of any other person.
(2) The act, omission or failure of any
person acting for any individual, association, partnership, corporation or
trust within the scope of the persons employment or office shall be deemed the
act, omission or failure of the individual, association, partnership,
corporation or trust, as well as of the person.
(3) This section shall not apply to transactions
subject to the exclusive jurisdiction of the Commodity Futures Trading
Commission. [1987 c.148 §8]
ADMINISTRATION
645.200
General authority to administer chapter. The director:
(1) May make such public or private
investigations within or outside this state as the director deems necessary to
determine whether a person has violated or is about to violate any provision of
this chapter or any rule or order of the director, or to aid in the enforcement
of this chapter or in the adoption of rules thereunder;
(2) May require or permit a person to file
a statement in writing, under oath or otherwise as the director determines, as
to all the facts and circumstances concerning the matter to be investigated;
(3) May publish information concerning any
violation of this chapter or any rule or order of the director; and
(4) If the director has reason to believe
that any person has been engaged or is engaging in any violation of this
chapter, may issue an order, subject to ORS 645.215, directed to the person to
cease and desist from the violation or threatened violation. [1987 c.148 §11]
645.205
Rules. (1) In accordance
with ORS chapter 183, the director may adopt such rules as are necessary to
carry out the provisions of this chapter.
(2) The director may:
(a) Adopt rules or issue orders
prescribing the terms and conditions of all transactions and contracts covered
by the provisions of this chapter which are not within the exclusive
jurisdiction of the federal Commodity Futures Trading Commission; and
(b) Exempt any person or transaction from
any provision of this chapter conditionally or unconditionally.
(3) No rule may be adopted unless the
director finds that the action is necessary or appropriate for the public
interest or for the protection of investors or speculators and consistent with
the purposes fairly intended by the provisions of this chapter. [1987 c.148 §10]
645.210
Investigatory power; compliance with subpoenas. (1) For the purpose of an investigation or
proceeding under this chapter, the director may administer oaths and
affirmations, subpoena witnesses, compel their attendance, take evidence and
require the production of books, papers, correspondence, memoranda, agreements
or other documents or records which the director deems relevant or material to
the inquiry. Each witness who appears before the director under a subpoena
shall receive the fees and mileage provided for witnesses in ORS 44.415 (2).
(2) If a person fails to comply with a
subpoena so issued or a party or witness refuses to testify on any matters, the
judge of the circuit court of any county, on the application of the director,
shall compel obedience by proceedings for contempt as in the case of
disobedience of the requirements of a subpoena issued from such court or a refusal
to testify therein. [1987 c.148 §12; 1989 c.980 §15a]
645.215
Notice of orders; hearing.
(1) Except as provided in ORS 183.745, upon the entry of an order under this
chapter, the director shall promptly give to all interested persons notice of
the order and notice that a hearing will be held on the order if a written
demand for a hearing is filed with the director within 20 days after the date
of service of the order.
(2) If timely demand for a hearing is
filed, the director shall hold a hearing on the order as provided by ORS
chapter 183. In the absence of a timely demand for a hearing, no person shall
be entitled to judicial review of the order.
(3) After the hearing, the director shall
enter a final order vacating, modifying or affirming the order. [1987 c.148 §13;
1991 c.734 §57a]
645.220
Appeal of order; modification of order. (1) A person aggrieved by an order of the director which has been the
subject of a timely application for hearing before the director shall be
entitled to judicial review of the order under ORS chapter 183.
(2) No judgment of a reviewing court under
ORS chapter 183 shall bar the director from thereafter vacating or modifying an
order involved in the proceeding for review, or entering any new order, for a
proper cause which was not decided by the reviewing court. [1987 c.148 §14;
2003 c.576 §527]
645.225
Action to compel compliance with rule or order; attorney fees; claim;
disposition of recovery. (1)
Whenever it appears to the director that a person has engaged in an act or
practice constituting a violation of any provision of this chapter or any rule
or order of the director, the director may bring an action in the name and on
behalf of the State of Oregon in any circuit court of this state to enjoin the
acts or practices and to enforce compliance with this chapter or such rule or
order. Upon a proper showing, a permanent or temporary injunction, restraining
order or writ of mandamus shall be granted. If the court finds that the
defendant has violated any provision of this chapter or any such rule or order,
the court may appoint a receiver, who may be the director, for the defendant or
the defendants assets. The court may not require the director to post a bond.
The court may award reasonable attorney fees to the director if the director
prevails in an action under this section. The court may award reasonable
attorney fees to a defendant who prevails in an action under this section if
the court determines that the director had no objectively reasonable basis for
asserting the claim or no reasonable basis for appealing an adverse decision of
the trial court.
(2) The director may include in any action
authorized by subsection (1) of this section:
(a) A claim for restitution on behalf of
persons injured by the act or practice constituting the subject matter of the
action; and
(b) A claim for disgorgement of illegal
gains or profits derived.
(3) Any recovery under subsection (2) of
this section shall be turned over to the General Fund of the State Treasury
unless the court requires other disposition. [1987 c.148 §15; 1995 c.696 §32]
645.230
Allegations of complaint; burden of proof. It is not necessary to negate any of the exemptions or classifications
provided in this chapter in a complaint, action, information, indictment or
other writ or proceeding laid or brought under this chapter; and the burden of
proof of an exemption or classification shall be upon the party claiming the
benefit of such exemption or classification. [1987 c.148 §16]
MISCELLANEOUS
645.300
Good faith actions not subject to liability. No provision of this chapter imposing civil or criminal liability
shall apply to an act done or omitted in good faith in conformity with a rule
or order of the director, notwithstanding that the rule or order may later be amended
or rescinded or be determined by judicial or other authority to be invalid for
any reason. [1987 c.148 §17]
645.305
Jurisdiction of courts. The
courts of this state shall have jurisdiction over any person, including a
nonresident of this state, who engages in any act or practice constituting a
violation of any provision of this chapter or any rule or order of the
director. [1987 c.148 §18]
645.310
Construction of chapter; purpose. This chapter may be construed and implemented to effectuate its general
purpose to protect investors and speculators, to prevent and prosecute illegal
and fraudulent schemes involving commodity contracts and to maximize
coordination with federal and other states law and the administration and
enforcement thereof. [1987 c.148 §2]
645.315
Short title. This chapter
shall be known as the Oregon Commodity Code. [1987 c.148 §1]
645.320
Effect of chapter on
PENALTIES
645.950
Civil penalty. (1) In
addition to all other penalties and enforcement provisions provided by law, the
director or a court may assess a penalty of not more than $5,000 for every
violation, which shall be paid to the General Fund of the State Treasury,
against any person who violates, or who participates or materially aids another
person in a violation, or who procures, aids or abets the violation of this
chapter or any rule or order of the director.
(2) Every violation is a separate offense
and, in the case of a continuing violation, each days continuance is a
separate violation, but the maximum penalty for any continuing violation shall
not exceed $20,000.
(3) Civil penalties under this section
shall be imposed as provided in ORS 183.745. [1987 c.148 §22; 1989 c.179 §4;
1991 c.734 §58]
645.990
Criminal penalty. Violation
of any provision of this chapter or any rule adopted by the director under this
chapter is a Class B felony. [1987 c.148 §21]
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