The petitioner, Jack W. Savage ("Savage"), petitions this court to review a final order of the Commodity Futures Trading Commission (the "Commission"), entered on March 1, 1976, denying his application for registration as a commodity trading advisor. The Commission's order was entered after an appeal from the decision and order of the Administrative Law Judge ("ALJ") denying such application. The Commission's order denied the application on grounds somewhat different from those relied on by ALJ. A brief statement of the background facts is necessary to place the legal issues in proper perspective.

Savage has been associated with the securities business since 1963, before which time he had graduated from college and had attended law school for one year. From 1963 to 1966 he was an employee of the brokerage firm of Francis I. Dupont & Co. (New Orleans office). In 1966 he formed his own firm, Investors Trading Company ("ITC"), which he operated for one year.

Savage's business life with ITC was not uneventful. On two separate occasions, April 15, 1966, and July 19, 1967, he had been permanently enjoined by a federal court from further violations of the securities laws. These injunctions were issued on consent.1 Later, on July 29, 1970, Savage was convicted after a jury trial of securities and mail fraud arising out of the operations of his ITC firm.2 A three year prison sentence was suspended on condition that he endeavor to repay his customers in full. In May 1974 probation was terminated, Savage having made full restitution and paid a $16,000 fine.

Since 1971 Savage has been self-employed as a commodity trader and advisor. In this connection he published a weekly subscription newsletter, The Commodity Exchange Bulletin, giving his views on the commodity market. He has also advised clients through seminars, lectures, letters and personal contacts.

In 1974 Congress enacted the Commodity Futures Trading Commission Act ("Act"), Pub.L. No. 93-463, 88 Stat. 1389, which amended the Commodity Exchange Act, 7 U.S.C. §§ 1-17a (1970). Pursuant to provisions of the Act, as a "commodity trading advisor,"3 Savage was required to register with the Commission. 7 U.S.C. § 6n (Supp. V 1975).4 On March 7, 1975, he made his application to be registered; and on July 25, 1975, the Commission ordered a public hearing pursuant to Section 8a of the Act, 7 U.S.C. § 12a (Supp. V 1975), amending 7 U.S.C. § 12a (1970), which provides:

"The Commission is authorized

(1) to register . . . commodity trading advisors . . . upon application in accordance with rules and regulations and in form and manner to be prescribed by the Commission; and

(2) to refuse to register any person

(B) if it is found, after opportunity for hearing, that the applicant is unfit to engage in the business for which the application for registration is made,

(i) because such applicant . . . at any time engaged in any practice of the character prohibited by this chapter or was convicted of a felony in any State or Federal court, or . . .

(ii) for other good cause shown . . . ."The public hearing was authorized to ascertain the facts relating to charges by the Commission's staff that Savage was "unfit" to be a commodity trading advisor.

The hearing was held on August 20, 1975, before an Administrative Law Judge who, after the Commission had introduced the injunctions against, and the conviction of, Savage, heard various witnesses in support of Savage's application.5 Savage himself did not testify. On September 29, 1975, the ALJ handed down his decision denying Savage's application, basing his decision on the ground that Savage had not met his burden of proving that the granting of registration would be in the public interest and deciding the case under section 8a(2)(B)(ii) and its "good cause" language. He held that § 8a(2)(B) (ii) took precedence over subsection (i) because the Commission's interpretative release defining "good cause" under subsection (ii) allowed denial of registration for a felony conviction for a securities violation within ten years,6 whereas subsection (i) allowed a denial for any felony conviction at any time in the past. Consequently, the specific terms of subsection (ii) prevailed over the more general phrasing of subsection (i).

Savage appealed to the Commission. In its opinion filed March 1, 1976, the Commission affirmed the ALJ's decision, but under section 8a(2)(B)(i), holding that the introduction of the 1970 securities fraud conviction established a prima facie case of unfitness; that the burden then shifted to Savage to prove fitness; that Savage had failed to carry this burden; and that the denial should be effected under the specific statutory authority of subsection (i) rather than the Commission's interpretative release.

The petition for review by this court was filed on March 9, 1976.

Prior to the effective date of the Act, April 21, 1975, commodity futures were governed by the Secretary of Agriculture. 7 U.S.C. §§ 1-17a (1970). The Act placed the Secretary's duties in the hands of the Commission and added to persons covered thereby, among others, commodity trading advisors. The petitioner represents that this is the first case to arise out of the first hearing held by the Commission.

He presents two constitutional challenges to the statutory provisions under which his application for registration was denied. First, he argues that a statutory requirement that a license be obtained in order to publish information and opinions regarding the commodities markets is an unwarranted impairment of First Amendment rights of freedom of speech and press; that the First Amendment covers newsletters even though they are published in anticipation of economic gain; and that prior restraints are presumed illegal especially where, as here, the Commission seeks to prohibit publication of a newsletter without any evidence whatsoever that it was used in a deceptive or fraudulent manner. Petitioner's second constitutional challenge to the registration section of the Act is that it is fatally vague in that it fails to define the word "unfit." The standard for denial is left so unclear that he feels men of common intelligence must guess at its meaning.

Savage next argues that the Commission violated the Administrative Procedure Act, 5 U.S.C. § 556(d) (1970), by requiring that he bear the burden of proving his fitness when the Commission did no more than introduce the prior conviction and injunctions. Indeed, Savage argues that to deny registration, something more than a prior conviction must be shown, for he does not feel that the statute will lend itself to the construction given it by the Commission.

Finally, Savage alleges that the Commission erred in concluding that he had failed to show the requisite mitigation and rehabilitation to prove his fitness to be a commodity trading advisor. For each of the injunctions as well as the conviction, Savage claims to have offered extensive testimony which showed a lack of moral culpability and demonstrated beyond question that the problems of his past would not adversely affect his performance as a trading advisor. The Commission, he charges, committed error by ignoring the extensive record showing Savage's advising capabilities and in refusing to recognize that Savage would be unable to commit the harm sought to be prevented by the statute because as an advisor he would not handle customer funds.7

Despite Savage's arguments, we conclude that the Commission correctly determined that Savage's felony conviction established his unfitness to be a registered trading advisor. The plain words of § 8a(2)(B)(i) of the Act reflect a Congressional judgment that proof of a felony conviction, without more, will establish a prima facie case of an applicant's unfitness. Once the Commission proved Savage's 1970 conviction, his application could have been denied; it became Savage's burden to go forward to persuade the Commission to exercise its discretion to allow him application despite his past. The proceeding conformed entirely with the guidelines of the Administrative Procedure Act; Savage's presentation simply failed to convince the Commission.

Savage's conviction involved a serious breach of duty owed to customers while he was engaged as a professional in the securities industry, an area with fiduciary duties analogous to those in the commodities industry. He ignores the clear import of the statute when he argues that the Commission must show proof beyond the conviction to support the charge of unfitness. The Commission retains discretion to permit registration if it should be persuaded that the applicant, although convicted of a felony, presents no danger to the public; but this fact does not cast doubt upon the authority of the Commission to refuse registration on proof of the disqualifying act alone.

The Act's requirement of a hearing is not designed to add to the burden of proof of the Commission; it is meant only to assure the applicant his Due Process protections. Here, the Commission carefully considered the evidence offered by Savage regarding extenuating circumstances and rehabilitation; but since the evidence failed to show any rehabilitative progress and did not touch on Savage's relationships with his clients, the Commission correctly held that it failed to counterbalance the felony conviction. Furthermore, the Commission rightly rejected evidence offered to show that even if Savage were a trading advisor he could not "harm" the public because of the size of the market and the distance maintained between trading advisors and clients. Congress has already made the judgment that trading advisors hold a fiduciary relationship and must meet high standards so as to protect the public.

We find no merit in Savage's constitutional challenges to this regulatory Act. Commercial speech is entitled to a measure of First Amendment protection, Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 96 S. Ct. 1817, 48 L. Ed. 2d 346 (1976), but it has long been recognized that the Amendment does not remove a business engaged in the communication of information from general laws regulating business practices. As Justice Harlan stated in Curtis Publishing Co. v. Butts, 388 U.S. 130, 150, 87 S. Ct. 1975, 1989, 18 L. Ed. 2d 1094 (1967):

"A business 'is not immune from regulation because it is an agency of the press. . . .' Federal securities regulation, mail fraud statutes, and common-law actions for deceit and misrepresentation are only some examples of our understanding that the right to communicate information of public interest is not 'unconditional.' " (Citations and footnotes omitted).

See also Securities and Exchange Commission v. Wall Street Transcript Corp., 422 F.2d 1371 (2d Cir. 1970). At issue here is not the worth or accuracy of Savage's publication, The Commodity Exchange Bulletin. He might well have advised his clients with skill as to what commodities to buy and sell. But Congress was interested in the character of the advisor and publisher not his advice or publication and in its desire to protect the public it had a right to evince this interest.

In appraising Savage's contentions, we must be mindful of a Congressional purpose, clearly evidenced at least since 1933, to protect the American investing and speculating public not only from fraud and fraudulent practices, but from those whose past actions indicate that they might be tempted to engage in such practices. Witness the Securities Act of 1933, 15 U.S.C. § 77a et seq. (1970), and as amended (Supp. V 1975), the Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq. (1970), and the host of regulatory statutes since then. See, e. g., the Investment Advisors Act of 1940, 15 U.S.C. § 80a-1 et seq. (1970). Congress cannot specify licensing requirements for each particular applicant but, of necessity, must within reason adopt somewhat general standards and authorize some agency to apply them.8

Unfortunately for Savage, his disagreement lies with Congress, not the courts. Congress has made explicit its legislative conclusion that trading advisors must meet a high standard of character in order to protect unsuspecting traders. Savage can hardly claim that the legislative directive that a prior felony conviction disqualifies an applicant is irrational when, as here, the prior felony was precisely the kind of securities fraud and misdealing that the Act is designed to prevent.

Accordingly, we deny review of the Commission's order refusing petitioner's registration as a commodity trading advisor.