BPC 12024 – Selling Short Quantity

Selling Short Quantity – Table of Contents

• BPC 12024 Overview
• BPC 12024 Sentencing
• BPC 12024 Defending
• Selling Short Quantity – Hire Us

BPC 12024 – Overview

It is unlawful for any person, by themselves or through an agent to sell any commodity amount for less than what that person represents that quantity to be.

What is a person under Business and Professions Code 12024 BPC?

A person is any individual human being, corporation, partnership, limited liability company, association, joint stock company, trust, unincorporated organization, government or political subdivision of a government, or other financial institution.

What is the definition of a commodity under Business and Professions Code 12024 BPC?

The California Commodity Law of 1990 provides the definition of the word commodity and its scope in business. Commodities can be traded on an organized exchange like the Chicago Board of Trade (CBOT) or the Chicago Mercantile Exchange (CME), or between private parties. A commodity is any agriculture product whether it be: any grain; any livestock; any metal; any mineral; any precious metals; any fuels; any gem or gemstone; or any foreign currency that can be rightful taxed by the State of California and the United States Government.

What is not a commodity as specified under Business and Professions Code 12024 BPC?

The following are not commodities: any coin that has a fair market value of at least 15 percent higher than the underlying asset it represents or is made from; or any artwork sold by public auctions, private dealers, or by private sale.

What is a commodity contract under Business and Professions Code 12024 BPC?

A Commodity contract is any account, agreement between one or more parties classified as persons under the laws of the State of California, which include business entities; for the purchase and or sale of one or more commodities by an offeror (seller) to an offeree (buyer); even if an intermediary (speculator, hedger, scalper, trader) is used. Contracts can be characterized as a cash contract on delivery; a deferred shipment and or deferred delivery with less emphasis on price (forward contract); or as a cash contract specified on a delivery of price and or deferred price shipment received or paid with less emphasis on quantity because the quantity is fixed (futures contract); or options contracts that give a party the right but not the obligation to purchase or sell a commodity or its contract. Upon time for delivery the commodity can be sent from a farm, mining ore, then transferred to a wholesaler who will deliver the goods to retailers such as a grocery store or jewelry store.

What are precious metals as defined under Business and Professions Code 12024 BPC?

Precious metals are Silver; Gold; Platinum; Palladium; Copper or others that are listed by the Commodities Future Trading Exchange Commission (CFTC).

Who regulates commodity contracts under Business and Professions Code 12024 BPC?

Commodity Contracts are regulated for State compliance under the Commodity Exchange Act and is so regulated by the Commodities Future Trading Exchange Commission for organized exchanges (CFTC).

Who can trade commodities on organized exchanges under Business and Professions Code 12024 BPC?

A series 3 license is administered by the Commodities Futures and Trading Commission (CFTC) by examinations, which allow be to the CFTC to administer the license to those who pass the test. The following can hold a series 3 license: future commission merchants; commodity pool operators; commodity trading advisors; introduction brokers; leverage transaction merchants; any agents or associates of the same; floor brokers; any agents or associates of the same.

What is the mental state for a violation of Business and Professions Code 12024 BPC?

The mental states required for a violation of Business and Professions Code 7027.3 BPC is willfully and intentionally. Willful is the conscious desire to complete an act on purpose without the regard of knowledge to its ability to create substantial injury to others; and reasonably understanding the circumstances that might result. Intentional is the conscious desire to complete an act on purpose, without the need to understand its unlawful character; with the reasonable understanding of the circumstances that might result. As applied to Business and Professions Code 12024, the State must prove, beyond a reasonable doubt; that the accused was a merchant broker; and or was properly licensed by the CFTC; and consciously knew they were handling the subject matter of a commodity; and consciously knew they were the creator of an offer of a commodity for sell to another; and consciously knew or reasonably should have by profession knew the given quantity of the commodity prior to establishing the commodity contract; and consciously knew the quantity was the material subject matter of creating a commodity contract; and such materiality was the reliance of interest to the offeror to entertain establishing a commodity contract; but the accused desired on purpose knowing it was unlawful to sell a quantity for less than what was purported to the offeree; and reasonable knew the circumstances that would result.

BPC 12024 – Sentencing

A violation of Business and Professions Code 12024 BPC is charged as a misdemeanor. The penalty for a violation is confinement not exceeding 1 year in jail; and fines not exceeding $1,000 dollars per unit of the asset quoted.

What are examples of a violation of Business and Professions Code 12024 BPC?

Yarde was a commodity broker with a series 3 license. He sold Corn. His new client Dan wanted to know what the fair price was for a May (CZ) 22 Corn futures at 5,000 bushels. The current future contract was $5.00 for $5,000 bushels. On May 22, Yarde delivered 4,500 bushels of corn. Dan was infuriated because this was an intentional interference without contractual relations that he set up in anticipation of receiving this high-grade corn from Nebraska. Dan not only informed the CFTC regarding Yarde’s conduct and asked for his license and set membership to be revoked; he also called the police. Yarde was arrested.

BPC 12024 – Defenses

• Modification to a contract between the offeror and offeror.
• Anticipatory repudiation of the offeree to not warrant full quantity delivery.
• The item contracted is not defined as a commodity.
• There was not a valid offer for a contract.

Selling Short Quantity – Hire Us

If you are charged with a violation of Business and Professions Code 12024 BPC, call The Esfandi Law Group, APLC. Contact Los Angeles criminal defense attorney Seppi Esfandi, principal attorney of The Esfandi Law Group, APLC.

Need a Criminal Defense Attorney? CALL NOW: 310-274-6529

Seppi Esfandi is an Expert Criminal Defense Attorney who has over 20 years of practice defending a variety of criminal cases.