skip navigation


Register for Latest Research

Stay Informed
Register with NCJRS to receive NCJRS's biweekly e-newsletter JUSTINFO and additional periodic emails from NCJRS and the NCJRS federal sponsors that highlight the latest research published or sponsored by the Office of Justice Programs.

NCJRS Abstract

The document referenced below is part of the NCJRS Virtual Library collection. To conduct further searches of the collection, visit the Virtual Library. See the Obtain Documents page for direction on how to access resources online, via mail, through interlibrary loans, or in a local library.


NCJ Number: 134303 Find in a Library
Title: Ernst and Ernst v. Hochfelder as Applied to Commodities Fraud: No Intent Required
Journal: Kentucky Law Journal  Volume:79  Issue:2  Dated:(1990-1991)  Pages:369-384
Author(s): H B Borders
Date Published: 1991
Page Count: 16
Type: Legislation/Policy Analysis
Format: Article
Language: English
Country: United States of America
Annotation: This analysis of the elements required for providing a claim of commodities fraud concludes that scienter, a mental state involving the intent to deceive, manipulate, or defraud, is not required to support such a claim.
Abstract: Churning is a common type of commodities fraud and involves excessive trading by the broker in view of the customer's investment objectives. Much debate has occurred regarding whether the mental state required to support a commodities churning claim is scienter. In Ernst and Ernst v. Hochfelder, the U.S. Supreme Court decided that scienter is a requirement for a securities fraud violation. However, the Court has not addressed the issue of scienter in the context of commodities fraud. In other cases, lower courts and the Commodities Futures Trading Commission have found that scienter is not an element of a commodities fraud violation. The cases that have held that scienter is a required element of commodities churning are based on faulty logic or no logic at all, considering the legislative history of the relevant law and the consistent refusal of Congress to include it in legislation regarding commodities fraud. Commodities trading and securities trading involve completely distinct statutory restrictions, although the Hochfelder analysis is useful in supporting the conclusion that scienter is not an element of a commodities churning claim. Footnotes (Author summary modified)
Main Term(s): Commodities fraud; Criminal intent; Securities fraud
Index Term(s): Appellate court decisions; US Supreme Court decisions
To cite this abstract, use the following link:

*A link to the full-text document is provided whenever possible. For documents not available online, a link to the publisher's website is provided. Tell us how you use the NCJRS Library and Abstracts Database - send us your feedback.