645.010 Commoditycontract or option transactions prohibited; exception
645.015 Personsexempt from prohibition; effect of federal law
645.020 Transactionsexempt from prohibition
645.025 Applicabilityof ORS 645.010, 645.035 and 645.040
645.030 Whentransactions are considered to occur in this state
645.035 Commoditymerchant required to comply with federal law
645.040 False,fraudulent or deceptive trading practices prohibited; business liable for actsor omissions of agents or employees; effect of federal law
ADMINISTRATION
645.200 Generalauthority to administer chapter
645.205 Rules
645.210 Investigatorypower; compliance with subpoenas
645.215 Noticeof orders; hearing
645.220 Appealof order; modification of order
645.225 Actionto compel compliance with rule or order; attorney fees; claim; disposition ofrecovery
645.230 Allegationsof complaint; burden of proof
MISCELLANEOUS
645.300 Goodfaith actions not subject to liability
645.305 Jurisdictionof courts
645.310 Constructionof chapter; purpose
645.315 Shorttitle
645.320 Effectof chapter on Oregon Securities Law
PENALTIES
645.950 Civilpenalty
645.990 Criminalpenalty
GENERALPROVISIONS
645.005Definitions.As used in this chapter:
(1)“Board of trade” means any person or persons engaged in buying or selling anycommodity or receiving the same for sale on consignment, whether such person orpersons are characterized as a board of trade, exchange or other form ofmarketplace.
(2)“Commodity” means, except as otherwise specified by the director by rule, allgoods, articles, products, foreign currency or items of any kind. “Commodity”does not include real property or any timber, agricultural or livestock productgrown or raised on real property and offered or sold by the owner or lessee ofsuch real property.
(3)“Commodity contract”:
(a)Means any account, agreement or contract for the purchase or sale of one ormore commodities, however characterized, which is primarily for speculation orinvestment purposes and not for use or consumption by the offeree or purchaseror between persons engaged in producing, processing, using commercially orhandling as merchants the commodity or any by-product thereof. Any contract forone or more commodities offered or sold shall, in the absence of evidence tothe contrary, be presumed to be offered or sold for speculation or investmentpurposes; and
(b)Does not include any contract or agreement which requires, and under which thepurchaser receives within 28 days of payment of any portion of the purchaseprice, physical delivery of the total amount of each commodity to be purchasedunder 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 butnot the obligation to purchase or sell one or more commodities or one or morecommodity 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 registeredwith the federal Securities and Exchange Commission.
(6)“Director” means the Director of the Department of Consumer and BusinessServices or an agent or employee authorized to act on the director’s behalf.
(7)“Financial institution” means an insured institution or trust company as thoseterms 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 intoa 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, anunincorporated organization, a government or a political subdivision of agovernment.
(11)“Sale” or “sell” includes every sale, contract of sale, contract to sell ordisposition for value. [1987 c.148 §3; 1993 c.744 §15; 1997 c.631 §506]
645.010Commodity contract or option transactions prohibited; exception. Except asotherwise provided in ORS 645.015 or 645.020:
(1)No person shall sell or purchase or offer to sell or purchase any commodityunder any commodity contract or under any commodity option or offer to enterinto or enter into as seller or purchaser any commodity contract or anycommodity option.
(2)No person shall participate or materially aid another person to commit an actor otherwise engage in a transaction prohibited by subsection (1) of thissection. [1987 c.148 §4; 1989 c.179 §2]
645.015Persons exempt from prohibition; effect of federal law. (1) Theprohibitions in ORS 645.010 shall not apply to any transaction by:
(a)A person registered with the federal Commodity Futures Trading Commission as afutures commission merchant or as a leverage transaction merchant whoseactivities require registration;
(b)A person affiliated with, and whose obligations and liabilities under thetransaction are guaranteed by, a person referred to in paragraph (a) of thissubsection;
(c)A person who is a member of a contract market designated by the federalCommodity 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, asa broker-dealer; or
(f)A contract market designated by the federal Commodity Futures TradingCommission or any clearinghouse thereof or a securities exchange registeredwith the federal Securities and Exchange Commission.
(2)The exemption provided by this section shall not apply to any transaction oractivity which is prohibited by the federal Commodity Exchange Act or rulesadopted by the federal Commodity Futures Trading Commission. [1987 c.148 §5]
645.020Transactions exempt from prohibition. The prohibitions in ORS 645.010 shallnot apply to the following:
(1)An account, agreement or transaction within the exclusive jurisdiction of thefederal Commodity Futures Trading Commission;
(2)A commodity contract for silver, gold, platinum, palladium, copper or otherprecious metal as defined by rule of the director whether in coin, bullion orother form if within seven days from the payment of any portion of the purchaseprice:
(a)The precious metals purchased are delivered to and held on the purchaser’sbehalf 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 deliverypurposes for any commodity on a contract market designated by the federalCommodity Futures Trading Commission;
(C)A storage facility licensed or regulated by the United States or any agencythereof; or
(D)A depository designated by rule of the director; and
(b)Unless otherwise provided by rule of the director, the depository issues andthe purchaser receives an instrument evidencing that such quantity of preciousmetals has been delivered to the depository on the purchaser’s behalf; and
(3)A commodity contract under which the offeree or the purchaser is a personreferred to in ORS 645.015, an insurance company or an investment company asdefined in the federal Investment Company Act of 1940, as amended. [1987 c.148 §6;1989 c.179 §3; 1997 c.249 §195]
645.025Applicability of ORS 645.010, 645.035 and 645.040. (1) ORS645.010, 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]
645.030When transactions are considered to occur in this state. (1) For thepurpose 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 itis 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 thisstate 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 eitherparty is then present in this state when the offeree directs it to the offerorin this state reasonably believing the offeror to be in this state and it isreceived at the place to which it is directed or at any post office in thisstate in the case of a mailed acceptance. [1987 c.148 §20]
645.035Commodity merchant required to comply with federal law. (1) No personshall engage in a trade or business or otherwise act as a commodity merchantunless such person:
(a)Is registered or temporarily licensed with the federal Commodity FuturesTrading Commission for each activity constituting such person as a commoditymerchant; or
(b)Is exempt from such registration by virtue of the federal Commodity ExchangeAct 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, anycommodity contract or commodity option required to be traded on or subject tothe rules of a contract market designated by the federal Commodity FuturesTrading Commission unless such board of trade is so designated for suchcommodity contract or commodity option. [1987 c.148 §7]
645.040False, fraudulent or deceptive trading practices prohibited; business liablefor acts or omissions of agents or employees; effect of federal law. (1) It isunlawful for any person, directly or indirectly, in connection with a commoditycontract 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 statementof a material fact or omit to state a material fact necessary in order to makethe statements made, in the light of the circumstances under which they weremade, not misleading;
(c)To engage in any transaction, act, practice or course of business whichoperates or would operate as a fraud or deceit upon any person; or
(d)To misappropriate or convert the funds, security or property of any otherperson.
(2)The act, omission or failure of any person acting for any individual,association, partnership, corporation or trust within the scope of the person’semployment or office shall be deemed the act, omission or failure of theindividual, association, partnership, corporation or trust, as well as of theperson.
(3)This section shall not apply to transactions subject to the exclusive jurisdictionof the Commodity Futures Trading Commission. [1987 c.148 §8]
ADMINISTRATION
645.200General authority to administer chapter. The director:
(1)May make such public or private investigations within or outside this state asthe director deems necessary to determine whether a person has violated or isabout to violate any provision of this chapter or any rule or order of thedirector, or to aid in the enforcement of this chapter or in the adoption ofrules thereunder;
(2)May require or permit a person to file a statement in writing, under oath orotherwise as the director determines, as to all the facts and circumstancesconcerning the matter to be investigated;
(3)May publish information concerning any violation of this chapter or any rule ororder of the director; and
(4)If the director has reason to believe that any person has been engaged or isengaging in any violation of this chapter, may issue an order, subject to ORS645.215, directed to the person to cease and desist from the violation orthreatened violation. [1987 c.148 §11]
645.205Rules.(1) In accordance with ORS chapter 183, the director may adopt such rules asare 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 alltransactions and contracts covered by the provisions of this chapter which arenot within the exclusive jurisdiction of the federal Commodity Futures TradingCommission; and
(b)Exempt any person or transaction from any provision of this chapterconditionally or unconditionally.
(3)No rule may be adopted unless the director finds that the action is necessaryor appropriate for the public interest or for the protection of investors orspeculators and consistent with the purposes fairly intended by the provisionsof this chapter. [1987 c.148 §10]
645.210Investigatory power; compliance with subpoenas. (1) For thepurpose of an investigation or proceeding under this chapter, the director mayadminister 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 deemsrelevant or material to the inquiry. Each witness who appears before thedirector under a subpoena shall receive the fees and mileage provided forwitnesses in ORS 44.415 (2).
(2)If a person fails to comply with a subpoena so issued or a party or witnessrefuses to testify on any matters, the judge of the circuit court of anycounty, on the application of the director, shall compel obedience byproceedings for contempt as in the case of disobedience of the requirements ofa subpoena issued from such court or a refusal to testify therein. [1987 c.148 §12;1989 c.980 §15a]
645.215Notice of orders; hearing. (1) Except as provided in ORS 183.745, upon theentry of an order under this chapter, the director shall promptly give to allinterested persons notice of the order and notice that a hearing will be heldon the order if a written demand for a hearing is filed with the directorwithin 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 onthe order as provided by ORS chapter 183. In the absence of a timely demand fora hearing, no person shall be entitled to judicial review of the order.
(3)After the hearing, the director shall enter a final order vacating, modifyingor affirming the order. [1987 c.148 §13; 1991 c.734 §57a]
645.220Appeal of order; modification of order. (1) A person aggrieved by an order ofthe director which has been the subject of a timely application for hearingbefore the director shall be entitled to judicial review of the order under ORSchapter 183.
(2)No judgment of a reviewing court under ORS chapter 183 shall bar the directorfrom thereafter vacating or modifying an order involved in the proceeding forreview, or entering any new order, for a proper cause which was not decided bythe reviewing court. [1987 c.148 §14; 2003 c.576 §527]
645.225Action to compel compliance with rule or order; attorney fees; claim;disposition of recovery. (1) Whenever it appears to the director that aperson has engaged in an act or practice constituting a violation of anyprovision of this chapter or any rule or order of the director, the directormay bring an action in the name and on behalf of the State of Oregon in anycircuit court of this state to enjoin the acts or practices and to enforcecompliance with this chapter or such rule or order. Upon a proper showing, apermanent or temporary injunction, restraining order or writ of mandamus shallbe granted. If the court finds that the defendant has violated any provision ofthis chapter or any such rule or order, the court may appoint a receiver, whomay be the director, for the defendant or the defendant’s assets. The court maynot require the director to post a bond. The court may award reasonableattorney fees to the director if the director prevails in an action under thissection. The court may award reasonable attorney fees to a defendant whoprevails in an action under this section if the court determines that thedirector had no objectively reasonable basis for asserting the claim or noreasonable basis for appealing an adverse decision of the trial court.
(2)The director may include in any action authorized by subsection (1) of thissection:
(a)A claim for restitution on behalf of persons injured by the act or practiceconstituting 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 theGeneral Fund of the State Treasury unless the court requires other disposition.[1987 c.148 §15; 1995 c.696 §32]
645.230Allegations of complaint; burden of proof. It is not necessary to negateany of the exemptions or classifications provided in this chapter in acomplaint, action, information, indictment or other writ or proceeding laid orbrought under this chapter; and the burden of proof of an exemption orclassification shall be upon the party claiming the benefit of such exemptionor classification. [1987 c.148 §16]
MISCELLANEOUS
645.300Good faith actions not subject to liability. No provision of this chapterimposing civil or criminal liability shall apply to an act done or omitted ingood faith in conformity with a rule or order of the director, notwithstandingthat the rule or order may later be amended or rescinded or be determined byjudicial or other authority to be invalid for any reason. [1987 c.148 §17]
645.305Jurisdiction of courts. The courts of this state shall have jurisdictionover any person, including a nonresident of this state, who engages in any actor practice constituting a violation of any provision of this chapter or anyrule or order of the director. [1987 c.148 §18]
645.310Construction of chapter; purpose. This chapter may be construed andimplemented to effectuate its general purpose to protect investors andspeculators, to prevent and prosecute illegal and fraudulent schemes involvingcommodity contracts and to maximize coordination with federal and other states’law and the administration and enforcement thereof. [1987 c.148 §2]
645.010 Commoditycontract or option transactions prohibited; exception
645.015 Personsexempt from prohibition; effect of federal law
645.020 Transactionsexempt from prohibition
645.025 Applicabilityof ORS 645.010, 645.035 and 645.040
645.030 Whentransactions are considered to occur in this state
645.035 Commoditymerchant required to comply with federal law
645.040 False,fraudulent or deceptive trading practices prohibited; business liable for actsor omissions of agents or employees; effect of federal law
ADMINISTRATION
645.200 Generalauthority to administer chapter
645.205 Rules
645.210 Investigatorypower; compliance with subpoenas
645.215 Noticeof orders; hearing
645.220 Appealof order; modification of order
645.225 Actionto compel compliance with rule or order; attorney fees; claim; disposition ofrecovery
645.230 Allegationsof complaint; burden of proof
MISCELLANEOUS
645.300 Goodfaith actions not subject to liability
645.305 Jurisdictionof courts
645.310 Constructionof chapter; purpose
645.315 Shorttitle
645.320 Effectof chapter on Oregon Securities Law
PENALTIES
645.950 Civilpenalty
645.990 Criminalpenalty
GENERALPROVISIONS
645.005Definitions.As used in this chapter:
(1)“Board of trade” means any person or persons engaged in buying or selling anycommodity or receiving the same for sale on consignment, whether such person orpersons are characterized as a board of trade, exchange or other form ofmarketplace.
(2)“Commodity” means, except as otherwise specified by the director by rule, allgoods, articles, products, foreign currency or items of any kind. “Commodity”does not include real property or any timber, agricultural or livestock productgrown or raised on real property and offered or sold by the owner or lessee ofsuch real property.
(3)“Commodity contract”:
(a)Means any account, agreement or contract for the purchase or sale of one ormore commodities, however characterized, which is primarily for speculation orinvestment purposes and not for use or consumption by the offeree or purchaseror between persons engaged in producing, processing, using commercially orhandling as merchants the commodity or any by-product thereof. Any contract forone or more commodities offered or sold shall, in the absence of evidence tothe contrary, be presumed to be offered or sold for speculation or investmentpurposes; and
(b)Does not include any contract or agreement which requires, and under which thepurchaser receives within 28 days of payment of any portion of the purchaseprice, physical delivery of the total amount of each commodity to be purchasedunder 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 butnot the obligation to purchase or sell one or more commodities or one or morecommodity 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 registeredwith the federal Securities and Exchange Commission.
(6)“Director” means the Director of the Department of Consumer and BusinessServices or an agent or employee authorized to act on the director’s behalf.
(7)“Financial institution” means an insured institution or trust company as thoseterms 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 intoa 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, anunincorporated organization, a government or a political subdivision of agovernment.
(11)“Sale” or “sell” includes every sale, contract of sale, contract to sell ordisposition for value. [1987 c.148 §3; 1993 c.744 §15; 1997 c.631 §506]
645.010Commodity contract or option transactions prohibited; exception. Except asotherwise provided in ORS 645.015 or 645.020:
(1)No person shall sell or purchase or offer to sell or purchase any commodityunder any commodity contract or under any commodity option or offer to enterinto or enter into as seller or purchaser any commodity contract or anycommodity option.
(2)No person shall participate or materially aid another person to commit an actor otherwise engage in a transaction prohibited by subsection (1) of thissection. [1987 c.148 §4; 1989 c.179 §2]
645.015Persons exempt from prohibition; effect of federal law. (1) Theprohibitions in ORS 645.010 shall not apply to any transaction by:
(a)A person registered with the federal Commodity Futures Trading Commission as afutures commission merchant or as a leverage transaction merchant whoseactivities require registration;
(b)A person affiliated with, and whose obligations and liabilities under thetransaction are guaranteed by, a person referred to in paragraph (a) of thissubsection;
(c)A person who is a member of a contract market designated by the federalCommodity 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, asa broker-dealer; or
(f)A contract market designated by the federal Commodity Futures TradingCommission or any clearinghouse thereof or a securities exchange registeredwith the federal Securities and Exchange Commission.
(2)The exemption provided by this section shall not apply to any transaction oractivity which is prohibited by the federal Commodity Exchange Act or rulesadopted by the federal Commodity Futures Trading Commission. [1987 c.148 §5]
645.020Transactions exempt from prohibition. The prohibitions in ORS 645.010 shallnot apply to the following:
(1)An account, agreement or transaction within the exclusive jurisdiction of thefederal Commodity Futures Trading Commission;
(2)A commodity contract for silver, gold, platinum, palladium, copper or otherprecious metal as defined by rule of the director whether in coin, bullion orother form if within seven days from the payment of any portion of the purchaseprice:
(a)The precious metals purchased are delivered to and held on the purchaser’sbehalf 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 deliverypurposes for any commodity on a contract market designated by the federalCommodity Futures Trading Commission;
(C)A storage facility licensed or regulated by the United States or any agencythereof; or
(D)A depository designated by rule of the director; and
(b)Unless otherwise provided by rule of the director, the depository issues andthe purchaser receives an instrument evidencing that such quantity of preciousmetals has been delivered to the depository on the purchaser’s behalf; and
(3)A commodity contract under which the offeree or the purchaser is a personreferred to in ORS 645.015, an insurance company or an investment company asdefined in the federal Investment Company Act of 1940, as amended. [1987 c.148 §6;1989 c.179 §3; 1997 c.249 §195]
645.025Applicability of ORS 645.010, 645.035 and 645.040. (1) ORS645.010, 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]
645.030When transactions are considered to occur in this state. (1) For thepurpose 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 itis 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 thisstate 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 eitherparty is then present in this state when the offeree directs it to the offerorin this state reasonably believing the offeror to be in this state and it isreceived at the place to which it is directed or at any post office in thisstate in the case of a mailed acceptance. [1987 c.148 §20]
645.035Commodity merchant required to comply with federal law. (1) No personshall engage in a trade or business or otherwise act as a commodity merchantunless such person:
(a)Is registered or temporarily licensed with the federal Commodity FuturesTrading Commission for each activity constituting such person as a commoditymerchant; or
(b)Is exempt from such registration by virtue of the federal Commodity ExchangeAct 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, anycommodity contract or commodity option required to be traded on or subject tothe rules of a contract market designated by the federal Commodity FuturesTrading Commission unless such board of trade is so designated for suchcommodity contract or commodity option. [1987 c.148 §7]
645.040False, fraudulent or deceptive trading practices prohibited; business liablefor acts or omissions of agents or employees; effect of federal law. (1) It isunlawful for any person, directly or indirectly, in connection with a commoditycontract 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 statementof a material fact or omit to state a material fact necessary in order to makethe statements made, in the light of the circumstances under which they weremade, not misleading;
(c)To engage in any transaction, act, practice or course of business whichoperates or would operate as a fraud or deceit upon any person; or
(d)To misappropriate or convert the funds, security or property of any otherperson.
(2)The act, omission or failure of any person acting for any individual,association, partnership, corporation or trust within the scope of the person’semployment or office shall be deemed the act, omission or failure of theindividual, association, partnership, corporation or trust, as well as of theperson.
(3)This section shall not apply to transactions subject to the exclusive jurisdictionof the Commodity Futures Trading Commission. [1987 c.148 §8]
ADMINISTRATION
645.200General authority to administer chapter. The director:
(1)May make such public or private investigations within or outside this state asthe director deems necessary to determine whether a person has violated or isabout to violate any provision of this chapter or any rule or order of thedirector, or to aid in the enforcement of this chapter or in the adoption ofrules thereunder;
(2)May require or permit a person to file a statement in writing, under oath orotherwise as the director determines, as to all the facts and circumstancesconcerning the matter to be investigated;
(3)May publish information concerning any violation of this chapter or any rule ororder of the director; and
(4)If the director has reason to believe that any person has been engaged or isengaging in any violation of this chapter, may issue an order, subject to ORS645.215, directed to the person to cease and desist from the violation orthreatened violation. [1987 c.148 §11]
645.205Rules.(1) In accordance with ORS chapter 183, the director may adopt such rules asare 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 alltransactions and contracts covered by the provisions of this chapter which arenot within the exclusive jurisdiction of the federal Commodity Futures TradingCommission; and
(b)Exempt any person or transaction from any provision of this chapterconditionally or unconditionally.
(3)No rule may be adopted unless the director finds that the action is necessaryor appropriate for the public interest or for the protection of investors orspeculators and consistent with the purposes fairly intended by the provisionsof this chapter. [1987 c.148 §10]
645.210Investigatory power; compliance with subpoenas. (1) For thepurpose of an investigation or proceeding under this chapter, the director mayadminister 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 deemsrelevant or material to the inquiry. Each witness who appears before thedirector under a subpoena shall receive the fees and mileage provided forwitnesses in ORS 44.415 (2).
(2)If a person fails to comply with a subpoena so issued or a party or witnessrefuses to testify on any matters, the judge of the circuit court of anycounty, on the application of the director, shall compel obedience byproceedings for contempt as in the case of disobedience of the requirements ofa subpoena issued from such court or a refusal to testify therein. [1987 c.148 §12;1989 c.980 §15a]
645.215Notice of orders; hearing. (1) Except as provided in ORS 183.745, upon theentry of an order under this chapter, the director shall promptly give to allinterested persons notice of the order and notice that a hearing will be heldon the order if a written demand for a hearing is filed with the directorwithin 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 onthe order as provided by ORS chapter 183. In the absence of a timely demand fora hearing, no person shall be entitled to judicial review of the order.
(3)After the hearing, the director shall enter a final order vacating, modifyingor affirming the order. [1987 c.148 §13; 1991 c.734 §57a]
645.220Appeal of order; modification of order. (1) A person aggrieved by an order ofthe director which has been the subject of a timely application for hearingbefore the director shall be entitled to judicial review of the order under ORSchapter 183.
(2)No judgment of a reviewing court under ORS chapter 183 shall bar the directorfrom thereafter vacating or modifying an order involved in the proceeding forreview, or entering any new order, for a proper cause which was not decided bythe reviewing court. [1987 c.148 §14; 2003 c.576 §527]
645.225Action to compel compliance with rule or order; attorney fees; claim;disposition of recovery. (1) Whenever it appears to the director that aperson has engaged in an act or practice constituting a violation of anyprovision of this chapter or any rule or order of the director, the directormay bring an action in the name and on behalf of the State of Oregon in anycircuit court of this state to enjoin the acts or practices and to enforcecompliance with this chapter or such rule or order. Upon a proper showing, apermanent or temporary injunction, restraining order or writ of mandamus shallbe granted. If the court finds that the defendant has violated any provision ofthis chapter or any such rule or order, the court may appoint a receiver, whomay be the director, for the defendant or the defendant’s assets. The court maynot require the director to post a bond. The court may award reasonableattorney fees to the director if the director prevails in an action under thissection. The court may award reasonable attorney fees to a defendant whoprevails in an action under this section if the court determines that thedirector had no objectively reasonable basis for asserting the claim or noreasonable basis for appealing an adverse decision of the trial court.
(2)The director may include in any action authorized by subsection (1) of thissection:
(a)A claim for restitution on behalf of persons injured by the act or practiceconstituting 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 theGeneral Fund of the State Treasury unless the court requires other disposition.[1987 c.148 §15; 1995 c.696 §32]
645.230Allegations of complaint; burden of proof. It is not necessary to negateany of the exemptions or classifications provided in this chapter in acomplaint, action, information, indictment or other writ or proceeding laid orbrought under this chapter; and the burden of proof of an exemption orclassification shall be upon the party claiming the benefit of such exemptionor classification. [1987 c.148 §16]
MISCELLANEOUS
645.300Good faith actions not subject to liability. No provision of this chapterimposing civil or criminal liability shall apply to an act done or omitted ingood faith in conformity with a rule or order of the director, notwithstandingthat the rule or order may later be amended or rescinded or be determined byjudicial or other authority to be invalid for any reason. [1987 c.148 §17]
645.305Jurisdiction of courts. The courts of this state shall have jurisdictionover any person, including a nonresident of this state, who engages in any actor practice constituting a violation of any provision of this chapter or anyrule or order of the director. [1987 c.148 §18]
645.310Construction of chapter; purpose. This chapter may be construed andimplemented to effectuate its general purpose to protect investors andspeculators, to prevent and prosecute illegal and fraudulent schemes involvingcommodity contracts and to maximize coordination with federal and other states’law and the administration and enforcement thereof. [1987 c.148 §2]
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645.010 Commoditycontract or option transactions prohibited; exception
645.015 Personsexempt from prohibition; effect of federal law
645.020 Transactionsexempt from prohibition
645.025 Applicabilityof ORS 645.010, 645.035 and 645.040
645.030 Whentransactions are considered to occur in this state
645.035 Commoditymerchant required to comply with federal law
645.040 False,fraudulent or deceptive trading practices prohibited; business liable for actsor omissions of agents or employees; effect of federal law
ADMINISTRATION
645.200 Generalauthority to administer chapter
645.205 Rules
645.210 Investigatorypower; compliance with subpoenas
645.215 Noticeof orders; hearing
645.220 Appealof order; modification of order
645.225 Actionto compel compliance with rule or order; attorney fees; claim; disposition ofrecovery
645.230 Allegationsof complaint; burden of proof
MISCELLANEOUS
645.300 Goodfaith actions not subject to liability
645.305 Jurisdictionof courts
645.310 Constructionof chapter; purpose
645.315 Shorttitle
645.320 Effectof chapter on Oregon Securities Law
PENALTIES
645.950 Civilpenalty
645.990 Criminalpenalty
GENERALPROVISIONS
645.005Definitions.As used in this chapter:
(1)“Board of trade” means any person or persons engaged in buying or selling anycommodity or receiving the same for sale on consignment, whether such person orpersons are characterized as a board of trade, exchange or other form ofmarketplace.
(2)“Commodity” means, except as otherwise specified by the director by rule, allgoods, articles, products, foreign currency or items of any kind. “Commodity”does not include real property or any timber, agricultural or livestock productgrown or raised on real property and offered or sold by the owner or lessee ofsuch real property.
(3)“Commodity contract”:
(a)Means any account, agreement or contract for the purchase or sale of one ormore commodities, however characterized, which is primarily for speculation orinvestment purposes and not for use or consumption by the offeree or purchaseror between persons engaged in producing, processing, using commercially orhandling as merchants the commodity or any by-product thereof. Any contract forone or more commodities offered or sold shall, in the absence of evidence tothe contrary, be presumed to be offered or sold for speculation or investmentpurposes; and
(b)Does not include any contract or agreement which requires, and under which thepurchaser receives within 28 days of payment of any portion of the purchaseprice, physical delivery of the total amount of each commodity to be purchasedunder 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 butnot the obligation to purchase or sell one or more commodities or one or morecommodity 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 registeredwith the federal Securities and Exchange Commission.
(6)“Director” means the Director of the Department of Consumer and BusinessServices or an agent or employee authorized to act on the director’s behalf.
(7)“Financial institution” means an insured institution or trust company as thoseterms 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 intoa 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, anunincorporated organization, a government or a political subdivision of agovernment.
(11)“Sale” or “sell” includes every sale, contract of sale, contract to sell ordisposition for value. [1987 c.148 §3; 1993 c.744 §15; 1997 c.631 §506]
645.010Commodity contract or option transactions prohibited; exception. Except asotherwise provided in ORS 645.015 or 645.020:
(1)No person shall sell or purchase or offer to sell or purchase any commodityunder any commodity contract or under any commodity option or offer to enterinto or enter into as seller or purchaser any commodity contract or anycommodity option.
(2)No person shall participate or materially aid another person to commit an actor otherwise engage in a transaction prohibited by subsection (1) of thissection. [1987 c.148 §4; 1989 c.179 §2]
645.015Persons exempt from prohibition; effect of federal law. (1) Theprohibitions in ORS 645.010 shall not apply to any transaction by:
(a)A person registered with the federal Commodity Futures Trading Commission as afutures commission merchant or as a leverage transaction merchant whoseactivities require registration;
(b)A person affiliated with, and whose obligations and liabilities under thetransaction are guaranteed by, a person referred to in paragraph (a) of thissubsection;
(c)A person who is a member of a contract market designated by the federalCommodity 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, asa broker-dealer; or
(f)A contract market designated by the federal Commodity Futures TradingCommission or any clearinghouse thereof or a securities exchange registeredwith the federal Securities and Exchange Commission.
(2)The exemption provided by this section shall not apply to any transaction oractivity which is prohibited by the federal Commodity Exchange Act or rulesadopted by the federal Commodity Futures Trading Commission. [1987 c.148 §5]
645.020Transactions exempt from prohibition. The prohibitions in ORS 645.010 shallnot apply to the following:
(1)An account, agreement or transaction within the exclusive jurisdiction of thefederal Commodity Futures Trading Commission;
(2)A commodity contract for silver, gold, platinum, palladium, copper or otherprecious metal as defined by rule of the director whether in coin, bullion orother form if within seven days from the payment of any portion of the purchaseprice:
(a)The precious metals purchased are delivered to and held on the purchaser’sbehalf 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 deliverypurposes for any commodity on a contract market designated by the federalCommodity Futures Trading Commission;
(C)A storage facility licensed or regulated by the United States or any agencythereof; or
(D)A depository designated by rule of the director; and
(b)Unless otherwise provided by rule of the director, the depository issues andthe purchaser receives an instrument evidencing that such quantity of preciousmetals has been delivered to the depository on the purchaser’s behalf; and
(3)A commodity contract under which the offeree or the purchaser is a personreferred to in ORS 645.015, an insurance company or an investment company asdefined in the federal Investment Company Act of 1940, as amended. [1987 c.148 §6;1989 c.179 §3; 1997 c.249 §195]
645.025Applicability of ORS 645.010, 645.035 and 645.040. (1) ORS645.010, 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]
645.030When transactions are considered to occur in this state. (1) For thepurpose 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 itis 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 thisstate 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 eitherparty is then present in this state when the offeree directs it to the offerorin this state reasonably believing the offeror to be in this state and it isreceived at the place to which it is directed or at any post office in thisstate in the case of a mailed acceptance. [1987 c.148 §20]
645.035Commodity merchant required to comply with federal law. (1) No personshall engage in a trade or business or otherwise act as a commodity merchantunless such person:
(a)Is registered or temporarily licensed with the federal Commodity FuturesTrading Commission for each activity constituting such person as a commoditymerchant; or
(b)Is exempt from such registration by virtue of the federal Commodity ExchangeAct 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, anycommodity contract or commodity option required to be traded on or subject tothe rules of a contract market designated by the federal Commodity FuturesTrading Commission unless such board of trade is so designated for suchcommodity contract or commodity option. [1987 c.148 §7]
645.040False, fraudulent or deceptive trading practices prohibited; business liablefor acts or omissions of agents or employees; effect of federal law. (1) It isunlawful for any person, directly or indirectly, in connection with a commoditycontract 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 statementof a material fact or omit to state a material fact necessary in order to makethe statements made, in the light of the circumstances under which they weremade, not misleading;
(c)To engage in any transaction, act, practice or course of business whichoperates or would operate as a fraud or deceit upon any person; or
(d)To misappropriate or convert the funds, security or property of any otherperson.
(2)The act, omission or failure of any person acting for any individual,association, partnership, corporation or trust within the scope of the person’semployment or office shall be deemed the act, omission or failure of theindividual, association, partnership, corporation or trust, as well as of theperson.
(3)This section shall not apply to transactions subject to the exclusive jurisdictionof the Commodity Futures Trading Commission. [1987 c.148 §8]
ADMINISTRATION
645.200General authority to administer chapter. The director:
(1)May make such public or private investigations within or outside this state asthe director deems necessary to determine whether a person has violated or isabout to violate any provision of this chapter or any rule or order of thedirector, or to aid in the enforcement of this chapter or in the adoption ofrules thereunder;
(2)May require or permit a person to file a statement in writing, under oath orotherwise as the director determines, as to all the facts and circumstancesconcerning the matter to be investigated;
(3)May publish information concerning any violation of this chapter or any rule ororder of the director; and
(4)If the director has reason to believe that any person has been engaged or isengaging in any violation of this chapter, may issue an order, subject to ORS645.215, directed to the person to cease and desist from the violation orthreatened violation. [1987 c.148 §11]
645.205Rules.(1) In accordance with ORS chapter 183, the director may adopt such rules asare 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 alltransactions and contracts covered by the provisions of this chapter which arenot within the exclusive jurisdiction of the federal Commodity Futures TradingCommission; and
(b)Exempt any person or transaction from any provision of this chapterconditionally or unconditionally.
(3)No rule may be adopted unless the director finds that the action is necessaryor appropriate for the public interest or for the protection of investors orspeculators and consistent with the purposes fairly intended by the provisionsof this chapter. [1987 c.148 §10]
645.210Investigatory power; compliance with subpoenas. (1) For thepurpose of an investigation or proceeding under this chapter, the director mayadminister 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 deemsrelevant or material to the inquiry. Each witness who appears before thedirector under a subpoena shall receive the fees and mileage provided forwitnesses in ORS 44.415 (2).
(2)If a person fails to comply with a subpoena so issued or a party or witnessrefuses to testify on any matters, the judge of the circuit court of anycounty, on the application of the director, shall compel obedience byproceedings for contempt as in the case of disobedience of the requirements ofa subpoena issued from such court or a refusal to testify therein. [1987 c.148 §12;1989 c.980 §15a]
645.215Notice of orders; hearing. (1) Except as provided in ORS 183.745, upon theentry of an order under this chapter, the director shall promptly give to allinterested persons notice of the order and notice that a hearing will be heldon the order if a written demand for a hearing is filed with the directorwithin 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 onthe order as provided by ORS chapter 183. In the absence of a timely demand fora hearing, no person shall be entitled to judicial review of the order.
(3)After the hearing, the director shall enter a final order vacating, modifyingor affirming the order. [1987 c.148 §13; 1991 c.734 §57a]
645.220Appeal of order; modification of order. (1) A person aggrieved by an order ofthe director which has been the subject of a timely application for hearingbefore the director shall be entitled to judicial review of the order under ORSchapter 183.
(2)No judgment of a reviewing court under ORS chapter 183 shall bar the directorfrom thereafter vacating or modifying an order involved in the proceeding forreview, or entering any new order, for a proper cause which was not decided bythe reviewing court. [1987 c.148 §14; 2003 c.576 §527]
645.225Action to compel compliance with rule or order; attorney fees; claim;disposition of recovery. (1) Whenever it appears to the director that aperson has engaged in an act or practice constituting a violation of anyprovision of this chapter or any rule or order of the director, the directormay bring an action in the name and on behalf of the State of Oregon in anycircuit court of this state to enjoin the acts or practices and to enforcecompliance with this chapter or such rule or order. Upon a proper showing, apermanent or temporary injunction, restraining order or writ of mandamus shallbe granted. If the court finds that the defendant has violated any provision ofthis chapter or any such rule or order, the court may appoint a receiver, whomay be the director, for the defendant or the defendant’s assets. The court maynot require the director to post a bond. The court may award reasonableattorney fees to the director if the director prevails in an action under thissection. The court may award reasonable attorney fees to a defendant whoprevails in an action under this section if the court determines that thedirector had no objectively reasonable basis for asserting the claim or noreasonable basis for appealing an adverse decision of the trial court.
(2)The director may include in any action authorized by subsection (1) of thissection:
(a)A claim for restitution on behalf of persons injured by the act or practiceconstituting 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 theGeneral Fund of the State Treasury unless the court requires other disposition.[1987 c.148 §15; 1995 c.696 §32]
645.230Allegations of complaint; burden of proof. It is not necessary to negateany of the exemptions or classifications provided in this chapter in acomplaint, action, information, indictment or other writ or proceeding laid orbrought under this chapter; and the burden of proof of an exemption orclassification shall be upon the party claiming the benefit of such exemptionor classification. [1987 c.148 §16]
MISCELLANEOUS
645.300Good faith actions not subject to liability. No provision of this chapterimposing civil or criminal liability shall apply to an act done or omitted ingood faith in conformity with a rule or order of the director, notwithstandingthat the rule or order may later be amended or rescinded or be determined byjudicial or other authority to be invalid for any reason. [1987 c.148 §17]
645.305Jurisdiction of courts. The courts of this state shall have jurisdictionover any person, including a nonresident of this state, who engages in any actor practice constituting a violation of any provision of this chapter or anyrule or order of the director. [1987 c.148 §18]
645.310Construction of chapter; purpose. This chapter may be construed andimplemented to effectuate its general purpose to protect investors andspeculators, to prevent and prosecute illegal and fraudulent schemes involvingcommodity contracts and to maximize coordination with federal and other states’law and the administration and enforcement thereof. [1987 c.148 §2]
