Federal Trade Commission v. Ken Roberts Co.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 4, 2001 Decided December 28, 2001

No. 00-5266

Federal Trade Commission,
Appellee

v.

Ken Roberts Company, et al.,
Appellants

Appeal from the United States District Court
for the District of Columbia
(No. 00ms00204)

Neil A. Goteiner argued the cause for appellants. With
him on the briefs was Richard E. Nathan.

Lawrence DeMille-Wagman, Attorney, Federal Trade
Commission, argued the cause for appellee. With him on the
brief was John F. Daly, Assistant General Counsel.

John G. Gaine was on the brief for amicus curiae Man-
aged Funds Association.

 Before: Edwards, Rogers, and Tatel, Circuit Judges.

Opinion for the court filed by Circuit Judge Edwards.

Edwards, Circuit Judge: The appellants - Ken Roberts
Company ("KRC"), Ken Roberts Institute, Inc. ("KRI"),
United States Chart Company ("Chart"), and Ted Warren
Corporation ("Warren") (collectively "Ken Roberts") - sell
instructional materials that purport to teach would-be inves-
tors how to make money investing in the commodities and
securities markets. In an effort to determine whether Ken
Roberts had engaged in deceptive advertising or selling of
goods or services in violation of sections 5 and 12 of the
Federal Trade Commission Act, 15 U.S.C. ss 45, 52, the
Federal Trade Commission ("FTC") issued civil investigative
demands ("CIDs") requiring Ken Roberts to produce docu-
ments and to respond to interrogatories relating to the com-
panies' business practices. The appellants answered some of
the interrogatories, but declined to respond to most of what
had been requested. Ken Roberts then filed a Petition to
Quash with the FTC. The appellants claimed that, because
the regulation of their advertising practices was subject to the
exclusive jurisdiction of the Commodities Futures Trading
Commission ("CFTC") or the Securities and Exchange Com-
mission ("SEC"), the FTC lacked authority to investigate.
The FTC denied the petition and then filed its own petition in
District Court seeking an order to enforce the CIDs. On
May 26, 2000, the District Court granted the FTC's petition
and ordered Ken Roberts to comply with the CIDs. The
appellants now seek review of that judgment.

Ken Roberts contends that, pursuant to the express terms
of the Commodity Exchange Act ("CEA"), the CFTC has
exclusive jurisdiction to regulate the disputed business prac-
tices of Ken Roberts Company and United States Chart
Company. Ken Roberts claims further that, because Ken
Roberts Institute and Ted Warren Corporation are subject to
pervasive regulation by the SEC under the Investment Advis-
ors Act ("IAA"), the FTC's authority to investigate these
companies has been impliedly preempted. Therefore, accord-
ing to Ken Roberts, because the FTC is without authority to

regulate the cited advertising and promotional practices of
Ken Roberts, the CIDs cannot be sustained. We disagree.

With rare exceptions (none of which applies here), a sub-
poena enforcement action is not the proper forum in which to
litigate disagreements over an agency's authority to pursue
an investigation. Unless it is patently clear that an agency
lacks the jurisdiction that it seeks to assert, an investigative
subpoena will be enforced. Whatever the ultimate merit of
Ken Roberts' preemption arguments - and we believe they
have little - appellants cannot overcome the long-standing
doctrine that precludes courts from entertaining challenges to
the jurisdiction of administrative agencies during subpoena-
enforcement proceedings. Because under no reasonable
reading of the CEA or the IAA does either of those statutes
manifestly strip the FTC of its broad power over deceptive
advertising, we affirm the District Court's decision that appel-
lants must comply with the FTC's compulsory process.

I. BACKGROUND

KRC and Chart market courses in commodities trading and
are therefore subject to the jurisdiction of the CFTC. KRI
and Warren offer instruction in securities trading, which
places them within the regulatory ambit of the SEC. These
companies rely heavily on Internet advertising: their web-
sites feature grandiose claims about potential earnings by
investors and testimonials from persons who have allegedly
benefitted from Ken Roberts' instructional materials.

Since 1994, the CFTC has carefully monitored the activities
of KRC to determine whether the company had violated
various sections of the CEA, particularly the statute's anti-
fraud provisions, 7 U.S.C. s 6o (1999). In at least four
separate investigations, the Commission sought to determine
whether KRC's advertising claims, both in print and, more
recently, on-line, can be substantiated. To this end, the
CFTC repeatedly used its subpoena power to compel KRC to
turn over business records and detailed documentation sup-
porting the promotional claims that it has made. The compa-
ny always has responded to CFTC subpoenas, and never has

been sanctioned or forced to admit any wrongdoing. While
one investigation did lead to a consent decree, pursuant to
which KRC and Chart registered with the CFTC as commod-
ity trading advisers ("CTAs"), see 7 U.S.C. s 1a(5), the Com-
mission has never taken enforcement action against KRC.

In 1999, the FTC, in conjunction with the CFTC and the
SEC, announced a coordinated investigation of deceptive day
trading promotions. In early September 1999, the FTC
formally authorized the use of compulsory process to deter-
mine whether various on-line merchants were engaged in
deceptive marketing practices. With an investigative agenda
aimed at high-risk/high-yield investment activity and suspi-
cious Internet advertising, the Commission soon focused on
Ken Roberts. On September 30, 1999, the FTC issued CIDs
requesting a wide variety of information through written
interrogatories and documents relating to Ken Roberts' busi-
ness practices. The CIDs were designed to reveal whether
the companies had mislead the public in promoting their
instructional courses. To this end, the Commission demand-
ed a full accounting of the companies' sales volume, as well as
evidence underlying the claims made in their testimonials and
other advertising materials.

Appellants resisted complying fully with the CIDs, believ-
ing them to be duplicative of the subpoenas that had already
been issued by the CFTC and beyond the FTC's power to
issue. Thus, Ken Roberts responded only to some of the
interrogatories and produced none of the requested docu-
ments. They then filed an administrative petition with the
FTC to quash the CIDs. In that proceeding, Ken Roberts
argued, as they do here, that the CEA and the IAA deprive
the Commission of its jurisdiction to regulate - and therefore
to investigate - deceptive advertising practices of, respective-
ly, CTAs and investment advisers. The FTC rejected this
petition, holding that the subpoenas were issued as part of a
lawful investigation, one fully authorized by the Federal
Trade Commission Act ("FTC Act"), 15 U.S.C. s 41 et seq.
(1997), and not foreclosed by any rival regulatory statute.
See In re Petition of The Ken Roberts Co. et al. to Quash
Civil Investigative Demands, File No. 9923259 (Feb. 25, 2000),

reprinted in Joint Appendix ("J.A.") 72. When Ken Roberts
persisted in refusing to comply with the CIDs, the FTC
petitioned the District Court to compel enforcement pursuant
to 15 U.S.C. s 57b-1(e). In a brief order, the District Court
granted the agency's petition to enforce. See FTC v. Ken
Roberts Co., Order, Misc. No. 00-204 (May 26, 2000), reprint-
ed in J.A. 248. Ken Roberts now appeals.

II. DISCUSSION

Appellants ask this court to hold that the jurisdiction-
conferring provisions of the CEA and the IAA preempt - the
former expressly, the latter implicitly - the jurisdiction that
the FTC would otherwise possess over appellants' allegedly
deceptive marketing of their investor-training courses.
Though the nature of our analysis obliges us to investigate
these questions, we need not answer them definitively, for we
have concluded that Ken Roberts' challenge is premature.

A. Jurisdictional Challenges to Agency Subpoenas

The threshold issue in this case is whether the appellants
may raise their challenge to the Commission's jurisdiction
now, or instead whether they are obliged to await an actual
enforcement action. In upholding the judgment of the Dis-
trict Court, we are governed by the long-standing doctrine
that administrative agencies must be given wide latitude in
asserting their power to investigate by subpoena. As the
Second Circuit has noted:

[A]t the subpoena enforcement stage, courts need not
determine whether the subpoenaed party is within the
agency's jurisdiction or covered by the statute it adminis-
ters; rather the coverage determination should wait until
an enforcement action is brought against the subpoenaed
party.

United States v. Construction Prods. Research, Inc., 73 F.3d
464, 470 (2d Cir. 1996).

The Supreme Court first articulated this doctrine in Endi-
cott Johnson Corp. v. Perkins, 317 U.S. 501 (1943). Endicott
established that, as a general proposition, agencies should

remain free to determine, in the first instance, the scope of
their own jurisdiction when issuing investigative subpoenas.
The Court therefore held that the Secretary of Labor was
entitled to enforce a subpoena for payroll records issued in an
effort to determine whether Endicott Johnson had run afoul
of the Walsh-Healey Public Contracts Act. The District
Court had scheduled a trial to determine whether Endicott
was covered by the Act, but the Supreme Court rejected this
approach. Rather, the Court held that, because "[t]he evi-
dence sought by the subpoena was not plainly incompetent
or irrelevant to any lawful purpose of the Secretary in the
discharge of her duties under the Act ... it was the duty of
the District Court to order its production for the Secretary's
consideration." Id. at 509 (emphasis added).

Following Endicott, courts of appeals have consistently
deferred to agency determinations of their own investigative
authority, and have generally refused to entertain challenges
to agency authority in proceedings to enforce compulsory
process. See, e.g., United States v. Sturm, Ruger & Co., 84
F.3d 1, 5 (1st Cir. 1996) ("We have repeatedly admonished
that questions concerning the scope of an agency's substan-
tive authority to regulate are not to be resolved in subpoena
enforcement proceedings."); Construction Prods. Research,
73 F.3d at 468-73 (enforcing subpoena issued by Nuclear
Regulatory Commission over objection that the subject mat-
ter of the agency's investigation was reserved by law for the
Department of Labor); EEOC v. Peat, Marwick, Mitchell &
Co., 775 F.2d 928, 930 (8th Cir. 1985) ("The initial determina-
tion of the coverage question is left to the administrative
agency seeking enforcement of the subpoena."); Donovan v.
Shaw, 668 F.2d 985, 989 (8th Cir. 1982) ("It is well-settled
that a subpoena enforcement proceeding is not the proper
forum in which to litigate the question of coverage under a
particular federal statute."); FTC v. Ernstthal, 607 F.2d 488,
490 (D.C. Cir. 1979) (acknowledging a concession that "an
individual may not normally resist an administrative subpoe-
na on the ground that the agency lacks regulatory jurisdiction
if the subpoena is issued at the investigational stage of the
proceeding").

 Subpoena enforcement power is not limitless, however. In
United States v. Morton Salt Co., 338 U.S. 632, 652 (1950),
the Court emphasized that a subpoena is proper only where
"the inquiry is within the authority of the agency, the demand
is not too indefinite and the information sought is reasonably
relevant." Accordingly, "there is no doubt that a court asked
to enforce a subpoena will refuse to do so if the subpoena
exceeds an express statutory limitation on the agency's inves-
tigative powers." Gen. Fin. Corp. v. FTC, 700 F.2d 366, 369
(7th Cir. 1983). Thus, a court must "assure itself that the
subject matter of the investigation is within the statutory
jurisdiction of the subpoena-issuing agency." FEC v. Ma-
chinists Non-Partisan Political League, 655 F.2d 380, 386
(D.C. Cir. 1981); see also FTC v. Texaco, Inc., 555 F.2d 862,
879 (D.C. Cir. 1977) (en banc) (administrative subpoenas
should be enforced unless the information sought is irrelevant
to "a lawful purpose of the agency"). These cases amply
demonstrate that while the courts' role in subpoena enforce-
ment may be a "strictly limited" one, it is neither minor nor
ministerial. See FTC v. Anderson, 631 F.2d 741, 744 (D.C.
Cir. 1979).

In adhering to the foregoing principles, we have held that
enforcement of an agency's investigatory subpoena will be
denied only when there is "a patent lack of jurisdiction" in an
agency to regulate or to investigate. See CAB v. Deutsche
Lufthansa Aktiengesellschaft, 591 F.2d 951, 952 (D.C. Cir.
1979); see also Gov't of Territory of Guam v. Sea-Land
Servs., Inc., 958 F.2d 1150, 1155 (D.C. Cir. 1992); Ernstthal,
607 F.2d at 492 (declining to relax "the well-established
barrier against ruling on the agency's regulatory jurisdiction
in subpoena enforcement proceeding ... where the absence
of jurisdiction is not patent, and there are no allegations of
agency bad faith"). As the following discussion will demon-
strate, there is no "patent lack of jurisdiction" in this case.

B. Preemption of the FTC's Power to Regulate Decep-
tive Advertising

On its own terms, the FTC Act gives the FTC ample
authority to investigate and, if deceptive practices are uncov-

ered, to regulate appellants' advertising practices. See 15
U.S.C. ss 45(a) (allowing the Commission to prevent unfair
competition and deceptive acts or practices in or affecting
commerce); 52-54 (allowing the Commission to regulate and
enjoin false advertising); 57b-1(c) (allowing the Commission
to issue CIDs to investigate possible s 45 violations). There-
fore, the FTC is entitled to have its subpoenas enforced
unless some other source of law patently undermines these
broad powers. Appellants contend that two federal statutes
have this effect. KRC and Chart, who sell courses in com-
modities investing, argue that the 1974 amendments to the
Commodity Exchange Act expressly preempted the FTC's
jurisdiction over their activities as registered CTAs. KRI
and Warren, who sell courses in securities investing, argue
that the Investment Advisers Act impliedly preempts the
Commission's regulatory power over their advertisements.
We consider these contentions in turn, and conclude that
neither has merit.

1. Appellants' Claim of Express Preemption Pursuant
to the Commodity Exchange Act

Though Congress has long sought to regulate the futures
market, the Commodity Futures Trading Commission is not
very old. The first federal statute dealing with commodities
trading, the 1921 Future Trading Act, was declared unconsti-
tutional by the Supreme Court , see Hill v. Wallace, 259 U.S.
44 (1922), and quickly replaced by the Grain Futures Act,
which the Court upheld, see Bd. of Trade of City of Chicago v.
Olsen, 262 U.S. 1 (1923). In 1936, this latter enactment was
amended and renamed the Commodity Exchange Act. That
initial version of the CEA delegated certain regulatory re-
sponsibilities to a commission composed of the Attorney
General, along with the Secretaries of Agriculture and Com-
merce. See Merrill Lynch, Pierce, Fenner & Smith v. Cur-
ran, 456 U.S. 353, 360-63 (1982); S. Rep. No. 93-1131, at 13-14
(1974), reprinted in 1974 U.S.C.C.A.N. 5843, 5855.

It was not until 1974, however, that the CFTC as it exists
today was born. After considerable deliberation, Congress
enacted the Commodity Future Trading Commission Act

("CFTCA"), an extensive overhaul of the CEA that both
expanded the statute's coverage and dramatically altered its
enforcement scheme. Curran, 456 U.S. at 365-66. Most
importantly, the CFTCA for the first time brought all com-
modities under federal regulation; the earlier statutes had
covered only enumerated agricultural goods that in no way
represented the vast array of products that were actually
being traded on futures markets. See H.R. Rep. No. 93-963,
at 38 (1974). The Commission spawned by the 1974 statute
was an independent regulatory agency invested with broad
powers to regulate futures trading and commodities ex-
changes. See S. Rep. No. 93-1131, at 2-3, 1974 U.S.C.C.A.N.
at 5844-45; CFTC v. Schor, 478 U.S. 833, 836 (1986) (describ-
ing the "sweeping authority" entrusted to the CFTC). Con-
gress authorized the CFTC to bring an action for injunctive
relief in federal district court against anyone violating the
CEA or the regulations promulgated thereunder. See Com-
modity Future Trading Commission Act of 1974, Pub. L. No.
93-463, s 211, 88 Stat. 1402 (1974) (codified as amended at 7
U.S.C. s 13a-1).

Moreover, and most important to the present case, the new
agency was invested with exclusive jurisdiction over certain
aspects of the futures trading market. See id., s 201, 88
Stat. 1389 (codified as amended at 7 U.S.C. s 2(a)(1)(A)
(2001)). The aim of this provision, according to one of its
chief sponsors, was to "avoid unnecessary, overlapping and
duplicative regulation," especially as between the Securities
and Exchange Commission and the new CFTC. 120 Cong.
Rec. H34,736 (Oct. 9, 1974) (remarks of House Agriculture
Committee Chairman Poage); Philip F. Johnson, The Com-
modity Futures Trading Commission Act: Preemption as
Public Policy, 29 Vand. L. Rev. 12-13; 16-17 (1976).

In determining what Congress intended when it passed
s 2(a)(1)(A), we must focus on the precise text of the enacted
legislation. See Carter v. United States, 530 U.S. 255, 271
(2000) ("In analyzing a statute, we begin by examining the
text, not by psychoanalyzing those who enacted it.") (internal
citations omitted). Section 2(a)(1)(A) reads as follows:

 The Commission shall have exclusive jurisdiction ...
with respect to accounts, agreements (including any
transaction which is of the character of, or is commonly
known to the trade as, an "option", "privilege", "indemni-
ty", "bid", "offer", "put", "call", "advance guaranty", or
"decline guaranty"), and transactions involving con-
tracts of sale of a commodity for future delivery, traded
or executed on a contract market designated or deriva-
tives transaction execution facility registered pursuant to
section 7 or 7a of this title or any other board of trade,
exchange, or market, and transactions subject to regula-
tion by the Commission pursuant to section 23 of this
title. Except as hereinabove provided, nothing contained
in this section shall (I) supersede or limit the jurisdiction
at any time conferred on the Securities and Exchange
Commission or other regulatory authorities under the
laws of the United States or of any State, or (II) restrict
the Securities and Exchange Commission and such other
authorities from carrying out their duties and responsi-
bilities in accordance with such laws. Nothing in this
section shall supersede or limit the jurisdiction conferred
on courts of the United States or any State.

7 U.S.C. s 2(a)(1)(A) (emphasis added). Appellants (KRC
and Chart) contend that this provision precludes the FTC
from regulating their activities as registered CTAs, because
the statute gives the CFTC "exclusive jurisdiction" over
"accounts, agreements ... and transactions involving con-
tracts of sale of a commodity for future delivery." In other
words, Ken Roberts claims that the advertising and pro-
motion of educational materials that purport to teach inves-
tors how to get rich trading futures are "transactions involv-
ing contracts of sale of a commodity for future delivery."
Thus, appellants would have us construe this phrase to confer
exclusive jurisdiction on the CFTC over the marketing prac-
tices of firms that sell not commodities themselves, but rather
instruction in commodities trading. We find this interpreta-
tion of the Commission's exclusive jurisdiction to be far-
fetched, to say the least.

 On its face, s 2(a)(1)(A) confers exclusive jurisdiction to the
CFTC over a limited, discrete set of items related to the
making of futures contracts. Specifically, these are (1) "ac-
counts ... involving contracts of sale of a commodity for
future delivery," (2) "agreements" involving the same, (3)
"transactions" involving the same, and (4) "transactions sub-
ject to regulation by the Commission pursuant to section 23 of
this title" (dealing with so-called "margin" or "leverage"
contracts). It is certainly not obvious that the advertising at
issue in this case fits in any of these categories. "Transac-
tions," broadly construed, is perhaps appellants' best bet.
Yet, it strains common parlance to construe "transactions
involving contracts of sale of a commodity" to include the
marketing practices of a firm that does not buy and sell
futures, but rather merely instructs others how to do so. As
it is generally understood, the word "transactions" conveys a
reciprocity, a mutual exchange, which seems absent from the
allegedly deceptive advertising materials that the FTC seeks
to investigate in this case. See Webster's Third New Inter-
national Dictionary 2425-26 (defining "transaction" as, inter
alia, "a business deal" and "a communicative action or activi-
ty involving two or more parties or two things reciprocally
affecting or influencing each other").

Appellants seek to overcome this impression by pointing to
a separate provision in the statute that uses "transactions" in
a different, and more expansive, way. As part of the 1974
overhaul of the CEA, Congress made a set of legislative
findings in which it announced that the activities of CTAs,
including "their advice, counsel, publications, writings, analy-
ses, and reports[,] customarily relate to and their operations
are directed toward and cause the purchase of commodities
for future delivery...." 7 U.S.C. s 6l. This finding then
goes on to say that "the foregoing transactions occur in such
volume as to affect substantially transactions on contract
markets." Id. (emphases added). Ken Roberts contends
that because Congress used the term "transactions" to mean
advice, counsel, publications, etc., in s 6l, we must read that
term the same way in the exclusive jurisdiction provision in
s 2(a)(1)(A). "The rule of in pari materia - like any canon of

statutory construction - is a reflection of practical experience
in the interpretation of statutes: a legislative body generally
uses a particular word with a consistent meaning in a given
context." Erlenbaugh v. United States, 409 U.S. 239, 243
(1972). In this case, however, appellants' attempted reliance
on the in pari materia canon of construction is entirely
unconvincing, because it proves far too much.

Appellants ignore the fact that s 6l uses the word "transac-
tions" twice in the same sentence to mean two different
things. The second appearance of the word - "transactions
on contract markets" - cannot reasonably embrace the broad
set of activities contemplated by the first. Instead, the
second reference to "transactions" in s 6l is best understood
to refer to the actual trading of futures contracts. As such,
the in pari materia rule is of little help to appellants, for it
provides no guidance as to which construction of "transac-
tions" the court should import from s 6l into s 2(a)(1)(A).

By contrast, when "transactions" is examined in the context
of s 2(a)(1)(A), it seems most naturally read as encompassing,
like its neighbors, a set of arrangements directly related to
the actual sale of commodities futures. In statutory interpre-
tation, after all, words are generally known by the company
they keep. Gustafson v. Alloyd Co., 513 U.S. 561, 575 (1995)
(describing and applying the noscitur a sociis canon). And
here, because "accounts" and "agreements" seem so plainly to
denote categories of financial arrangements through which
the trading of commodities occurs or is facilitated, it makes
sense to construe "transactions" in the same way.

These terms were added to the bill that became the
CFTCA in order to extend the Commission's exclusive juris-
diction over so-called "discretionary accounts," commodity
options, and other trading agreements described in the stat-
ute. See Johnson, at 14 & n.44; H.R. Conf. Rep. No. 93-1383
(1974), reprinted in 1974 U.S.C.C.A.N 5894, 5897 ("[T]he
Commission's [exclusive] jurisdiction ... includes the regula-
tion of commodity accounts, commodity trading agreements,
and commodity options."). Noscitur a sociis instructs us to
construe "transactions" in a similar light, as denoting a set of

actions closely linked to the actual trading of commodities.
Under this reading, all of the categories delineated in
s 2(a)(1)(A) describe business deals that involve the buying
and selling of futures, which comports with Congress' goal of
conferring the CFTC with sole regulatory authority over
"futures contract markets or other exchanges," H.R. Conf.
Rep. No. 93-1383, 1974 U.S.C.C.A.N. at 5897 (emphasis add-
ed), or "over options trading in commodities (but not in
securities)," S. Rep. No. 93-1131, at 31, 1974 U.S.C.C.A.N. at
5870 (emphasis added).

A second problem with the broad definition of "transac-
tions" proposed by the appellants is that it produces poten-
tially absurd results. See Griffin v. Oceanic Contractors,
Inc., 458 U.S. 564, 575 (1982) ("[I]nterpretations of a statute
which would produce absurd results are to be avoided if
alternative interpretations consistent with the legislative pur-
pose are available."). The first use of that word in s 6l
sweeps more broadly than just the "advice," "counsel," and
"publications" of CTAs; indeed, it includes their very "opera-
tions" as well. And an interpretation of s 2(a)(1)(A) under
which the CFTC was given exclusive authority over all CTA
"operations involving contracts of sale of a commodity," espe-
cially when coupled with the expansive reading of "involving"
urged by appellants, would seem to preclude virtually any
other government regulation affecting the futures trading
industry. It could suggest, for example, that government
agencies regulating employment relations or safety and
health would be powerless to take action against CTAs. We
do not believe that this is what Congress intended when it
enacted s 2(a)(1)(A).

As noted above, the statute's legislative history repeatedly
emphasizes that the CFTC's jurisdiction was "to be exclusive
with regard to the trading of futures on organized contract
markets." S. Rep. No. 93-1131, at 23, 1974 U.S.C.C.A.N. at
5863 (emphasis added). Indeed, as the Seventh Circuit has
recognized, the goal of the CFTCA was to bring the futures
markets "under a uniform set of regulations" and that "[o]nly
in the context of market regulation does the need for uniform
legal rules apply." Am. Agric. Movement, Inc. v. Bd. of

Trade of City of Chicago, 977 F.2d 1147, 1155-57 (7th Cir.
1992) (relying on this legislative purpose to hold that state
common law actions against commodities brokers are
preempted only when they would "directly affect trading on
or the operation of a futures market"). It is true that the
CFTC was created to regulate all commodities and commodi-
ties trading, see Point Landing, Inc. v. Omni Capital Int'l
Ltd., 795 F.2d 415, 420-21 (5th Cir. 1986); it does not follow
from this, however, that Congress intended to preempt the
activities of all other federal agencies in their regulatory
realms. "Preemption of the regulation of the market does
not also mean preemption of all law that might involve
participants in the market." Poplar Grove Planting and
Refining Co. v. Bache Halsey Stuart Inc., 465 F. Supp. 585,
592 (D. La. 1979). Appellants' position makes no sense
insofar as it suggests that the scope of the CFTC's exclusive
jurisdiction is broader than the scope of the agency's authori-
ty to regulate under the CEA.

We will give appellants the benefit of the doubt and assume
that what they really mean to argue is that the limits of the
exclusive jurisdiction provision in s 2(a)(1)(A) is coterminous
with the limits of the CFTC's regulatory authority under the
CEA. In other words, Ken Roberts appears to assume that,
at a minimum, whatever the Commission may regulate, it
regulates exclusively. This is a specious contention. Both
the text and purpose of the statute contemplate a regime in
which other agencies may share power with the CFTC over
activities that lie outside the scope of s 2(a)(1)(A), but that
still involve the activities of commodities advisers or that
implicate other provisions of the CEA. Indeed, the inclusion
of the so-called "regulatory savings clauses," s 2(a)(1)(A)(I)-
(II), makes clear that other agencies, such as the FTC, retain
their jurisdiction over all matters beyond the confines of
"accounts, agreements, and transactions involving contracts of
sale of a commodity for future delivery." Cf. Chicago Mer-
cantile Exch. v. SEC, 883 F.2d 537, 550 (7th Cir. 1989) (noting
that s 2 "carries no implicit preemptive force").

The imperfect overlap between s 2(a)(1)(A) and the rest of
the CEA is neatly demonstrated by the statute's antifraud

provision, on which the CFTC's own power to investigate
appellants, which it has done since 1994, presumably rests. 7
U.S.C. s 6o makes it unlawful, inter alia, for a CTA "to
engage in any transaction, practice, or course of business
which operates as a fraud or deceit upon any client or
participant or prospective client or participant." Thus, while
the CFTC has the clear statutory authority to regulate a
CTA's deceitful "practices" - and "practices," far more so
than "transactions," comfortably describes the advertising at
issue in this case - there is no reason to think that this
authority is exclusive. A "practice" or "course of business" is
quite plainly not a "transaction" - either in life or in this
statutory provision. (Nor for that matter is it an "account"
or "agreement.") As such, a comparison of the texts of s 6o
and s 2(a)(1)(A) appears to indicate that the CFTC's authori-
ty over CTAs is broader than the substantive scope of its
exclusive jurisdiction to regulate futures and futures markets.

In sum, then, both context (textual and historical) and
common sense support a reading of the exclusive jurisdiction
provision in which the phrase "accounts, agreements, and
transactions involving contracts of sale of a commodity" does
not cover the marketing of investor-education courses that
leads only tangentially to the actual purchase of futures.
While the FTC's investigation may implicate the CEA, we
believe that it falls outside of the range of subjects described
by s 2(a)(1)(A). At the very least, the foregoing discussion
illustrates that there is no "patent lack of jurisdiction" in the
FTC to investigate or regulate in this case. Appellants'
preemption arguments are simply not compelling enough to
overcome this court's long-standing chariness about entertain-
ing jurisdictional challenges to administrative subpoenas. Ac-
cordingly, we hold that the District Court's properly allowed
the FTC to proceed with its investigation of KRC and Chart.

2. Implied Preemption Under the Investment Advisers
Act

KRI and Warren, whose businesses involve securities rath-
er than commodities, assert that the comprehensive scope of
the Investment Advisers Act of 1940, 15 U.S.C. s 80b-1 et

seq. (1997), preempts the FTC's jurisdiction to regulate the
fraudulent practices of "investment advisers" such as them-
selves. Even if there were something to this claim, which we
doubt, it does not come close to establishing that the FTC is
manifestly without jurisdiction in regard to the subject mat-
ter of its subpoenas.

In contrast to the CEA, the IAA contains no express
exclusive jurisdiction provision. As such, the only vehicle by
which the FTC's otherwise-plenary power to investigate and
uproot unfair or deceptive trade practices could be disturbed
is through the doctrine of implied repeal. We have recog-
nized that, where intended by Congress, " 'a precisely drawn,
detailed statute pre-empts more general remedies.' " Galli-
ano v. U.S. Postal Serv., 836 F.2d 1362, 1367 (D.C. Cir. 1988)
(quoting Brown v. Gen. Servs. Admin., 425 U.S. 820, 834
(1976)). This can occur either where the two enactments are
in "irreconcilable conflict" or where the latter was clearly
meant to serve as a substitute for the former. Posadas v.
Nat'l City Bank, 296 U.S. 497, 503 (1936); cf. Demby v.
Schweiker, 671 F.2d 507, 513 (D.C. Cir. 1981) (Wright, J.,
concurring) (describing the two kinds of implied repeals).
Appellants contend that the antifraud provision of the IAA,
which prohibit investment advisers from engaging "in any
transaction, practice, or course of business which operates as
a fraud or deceit upon any client or prospective client," 15
U.S.C. s 80b-6(2), stands as just such a specific remedy that
displaces the more general coverage of the FTC Act.

To prevail at this stage of the litigation, KRI and Warren
must establish not merely that the IAA, properly construed,
deprives the FTC of jurisdiction, but that it does so patently.
However, the entire structure of the implied preemption
inquiry militates against such a finding in this case. Both the
Supreme Court and this court have observed that implied
repeals of one statute (or a provision in one statute) by
another are "not favored." Radzanower v. Touche Ross &
Co., 426 U.S. 148, 154 (1976) (quoting United States v. United
Cont'l Tuna Corp., 425 U.S. 164, 168 (1976)); Galliano, 836
F.2d at 1369 ("strongly disfavored"). They are recognized
only where the intention of the legislature is "clear and

manifest." Posadas, 296 U.S. at 503; Morton v. Mancari,
417 U.S. 535, 549-50 (1974) (some "affirmative showing" of
intent to repeal is necessary).

Because we live in "an age of overlapping and concurring
regulatory jurisdiction," Thompson Med. Co. v. FTC, 791
F.2d 189, 192 (D.C. Cir. 1986), a court must proceed with the
utmost caution before concluding that one agency may not
regulate merely because another may. E.g., Galliano, 836
F.2d 1369-70 (relying on the First Amendment and the canon
of constitutional doubt in holding that the Federal Election
Campaign Act partially preempted the postal fraud prescrip-
tions of 39 U.S.C. s 3005); see also Pennsylvania v. ICC, 561
F.2d 278, 292 (D.C. Cir. 1977) ("It is well established that
when two regulatory systems are applicable to a certain
subject matter, they are to be reconciled and, to the extent
possible, both given effect."). In this case, while it may be
true that the IAA and the FTC Act employ different verbal
formulae to describe their antifraud standards, it hardly
follows that they therefore impose conflicting or incompatible
obligations. See Radzanower, 426 U.S. at 155 (repeals only
implied to the extent necessary to make the later enacted law
work). Undoubtedly, entities in appellants' position can - and
of course should - refrain from engaging in both "unfair and
deceptive acts or practices" and "any transaction, practice, or
course of business which operates as a fraud or deceit upon a
client or prospective client." The proscriptions of the IAA
are not diminished or confused merely because investment
advisers must also avoid that which the FTC Act proscribes.
And, because these statutes are "capable of co-existence," it
becomes the duty of this court "to regard each as effective" -
at least absent clear congressional intent to the contrary.
Mancari, 417 U.S. at 551.

Appellants can point to nothing in the background or
history of the IAA that demonstrates (or even hints at) a
congressional intent to preempt the antifraud jurisdiction of
the FTC over those covered by the new statute. Nor does
the subsequent case law interpreting these statutes contain
such declarations. The closest case is perhaps Spinner Corp.
v. Princeville Develop. Corp., 849 F.2d 388, 392 n.4 (9th Cir.

1988), which notes that the "FTC has never undertaken to
adjudicate deceptive conduct in the sale and purchase of
securities, presumably because such transactions fall under
the comprehensive regulatory umbrella of the Securities and
Exchange Commission." Based on this observation, the court
held that Hawaii's "baby FTC Act," which was patterned
after the federal statute, did not regulate the purchase and
sale of securities, despite language that would seem to include
such activity. See id. Even if we agreed with the Ninth
Circuit's dubious reasoning - which implies that because a
power has not been exercised, the power does not exist - we
simply do not think that such indicia of intent are enough to
allow us to quash the FTC's subpoenas.

In sum, then, whatever the ultimate force of arguments
about the structure of the IAA or the FTC's historical
practice regarding securities transactions, neither of these
are sufficiently forceful to deprive the Commission of its
general prerogative to determine, at least in the first in-
stance, the scope of its own investigatory authority.

III. CONCLUSION

For the reasons given above, we hold that the FTC is
entitled to enforce its CIDs against all four appellants in this
case. Neither the Commodity Exchange Act nor the Invest-
ment Advisers Act evince an unambiguous intent to deprive
the FTC of its otherwise applicable authority to investigate
possibly deceptive advertising and marketing practices mere-
ly because those practices relate to either the commodities or
the securities business. Accordingly, the decision of the
District Court is affirmed.

So ordered.