The Eleventh Circuit held as a matter of first impression that a settlement between a self-regulatory organization (the National Futures Association or NFA) and Defendants did not preclude a subsequent CFTC action brought on the basis of the same action. The court found that equitable estoppel does not apply to a CFTC action where the Defendant entered into a settlement with a self-regulatory organization because (1) the settlement was with a private, nongovernmental organization, (2) the CFTC was not a party to the settlement, and (3) settlements with private, nongovernmental organizations do not preclude subsequent claims by government regulators. This ruling brings the Eleventh Circuit in accord with the D.C. Circuit and the Fourth Circuit, the only other Circuits to have addressed the issue. The court also held that common-law rules governing proximate cause apply when determining restitution for losses proximately caused by a Commodities Exchange Act (“CEA”) violation, overturning the district court’s finding that foreseeability was the relevant standard and that losses were foreseeable when the underlying transaction was illegal.

Eleventh Circuit Opinion