However, the CEA does not impose fiduciary duties on impersonal advisors. The leading authority for the proposition that the CEA imposes fiduciary obligations on all CTAs is
Savage v. CFTC, 548 F.2d 192, 197 (7th Cir.1977). However,
Savage cannot be read so broadly; the party in that case offered personalized advice,
id. at 194, and so would be considered a fiduciary under the common law. Nothing in
§ 6o indicates an intent on the part of Congress to impose fiduciary duties on impersonal advisors. Section 17(a) of the Securities Act of 1933,
15 U.S.C. § 77q(a), which contains language similar to
7 U.S.C. § 6o, does not impose fiduciary duties.
See Trussell v. United Underwriters, Ltd., 228 F.Supp. 757, 762 (D.Colo.1964);
see also SEC v. Maio, 51 F.3d 623, 631 (7th Cir.1995) (holding that a breach of a fiduciary duty connected with trading on material nonpublic information is necessary for a violation § 17(a), indicating that § 17(a) does not impose any independent fiduciary duties by its own language). Similarly, § 206 of the IAA,
15 U.S.C. § 80b–6, does not impose any new fiduciary duties, but only enforces already existing duties between clients and IAs. As the Supreme Court held in
Lowe, the definition of IAs is limited to personalized advisors who have fiduciary relationships with their clients as a matter of common law.
See SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 194, 84 S.Ct. 275, 11 L.Ed.2d 237 (1963) (“Congress
recognized the investment adviser to be” “a fiduciary.”);
id. at 201, 84 S.Ct. 275 (“The statute, in
recognition of the adviser's fiduciary relationship to his clients, requires that his advice be disinterested.”) (emphasis added). An analogous interpretation applies to the CEA, which effectuates the extant fiduciary duties of personalized advisors and other agents but does not impose fiduciary obligation on impersonal advisors.
See generally Hlavinka v. CFTC, 867 F.2d 1029, 1033 (7th Cir.1989) (stating that a commodities advisor is not a fiduciary for purposes of the CEA where the customer makes his own independent trading decisions);
CFTC v. Heritage Capital Advisory Servs., Ltd., 823 F.2d 171, 173 (7th Cir.1987) (rejecting breach of fiduciary duty claim under the CEA because only brokers who operate discretionary accounts are fiduciaries).
Section 6o does not permit the CFTC to impose fiduciary duties on impersonal CTAs such as CTS. Rather, these provisions permit the CFTC to bring proceedings against impersonal CTAs who commit fraud or engage in practices that operate as fraud and impose remedies to correct such violations. Thus, CTS's fear of being subjected to wide-ranging fiduciary duties is not a persuasive reason to decide that “client” unambiguously refers to only those who provide personal advice.