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Commodity Futures Trading Commission 

CEA CASES 

NAME: HARNEY, BURNS INC., JOHN T. FONTANA, ROBERT O. INGAL, AND A. JAMES COMENZO 

DOCKET NUMBER: 127 

DATE: APRIL 19, 1965 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Harney, Burns Inc., John T. Fontana, Robert O. Ingal, and A. James 

Comenzo, Respondents 

CEA Docket No. 127 

Complaint and Notice of Hearing under Section 6(b) of the Commodity Exchange 

Act 

There is reason to believe that the respondents, Harney, Burns Inc., John T. 

Fontana, Robert O. Ingal, and A. James Comenzo have violated the Commodity 

Exchange Act (7 U.S.C. 1 et seq.) and the regulations made pursuant thereto (17 

CFR, Part 1), and in accordance with the provisions of Section 6(b) of the said 

act (7 U.S.C. § 9), this complaint and notice of hearing is issued stating the 

charges in that respect as follows: 

I 

Respondent Harney, Burns Inc., is a New York corporation with its principal 

office and place of business at 50 Broadway, New York 4, New York. The said 

corporation is now, and was at all times material to this complaint, a 

registered futures commission merchant under the Commodity Exchange Act. 

II 

Respondents John T. Fontana, Robert O. Ingal, and A. James Comenzo, 

individuals, whose business address is 50 Broadway, New York 4, New York, are 

now and were at all times material to this complaint the 

President, Vice President and Secretary-Treasurer, respectively, of the 

aforesaid Harney, Burns Inc. and its principal stockholders. Respondents John 

T. Fontana and A. James Comenzo are now and were at all times material to this 

complaint members of the New York Produce Exchange, a duly designated contract 

market under the Commodity Exchange Act. 

III 

On or about December 28, 1964, respondent Harney, Burns Inc., in connection 

with its application for registration as a futures commission merchant under the 

Commodity Exchange Act for the year 1965, knowingly submitted to the Commodity 

Exchange Authority a false financial statement, as of December 22, 1964, 

attested to by respondent A. James Comenzo, which misrepresented and concealed 

the true financial condition of the respondent corporation. 

IV 

The acts and transactions hereinafter described were ordered and directed by 

or carried out by means of the acts of respondents John T. Fontana, Robert O. 

Ingal, and A. James Comenzo in their capacities as officers of the respondent 

corporation. 
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V 

Respondent Harney, Burns Inc., in the normal course of its business as a 

futures commission merchant, carried accounts for customers who traded in 

commodity futures subject to the provisions of the Commodity Exchange Act. In 

connection therewith, the said respondent had to its credit with a bank or other 

depository sums of money in varying amounts, 

held in segregated account and identified as customers' funds, representing 

deposits of margins by and trading profits accruing to such customers. 

VI 

On December 29, 1964, and again on December 30, 1964, respondent Harney, 

Burns Inc. was undersegregated in an amount of approximately $ 4,000, that is, 

the total amount of customers' funds held in segregation, as described in 

paragraph V hereof, was insufficient, by the aforesaid sum, to pay all credits 

and equities due to such customers. In connection therewith, respondent Harney, 

Burns Inc. prepared and maintained false records which purported to show that 

sufficient funds were held in segregated accounts to pay all credits and 

equities due its customers. 

VII 

On each business day during the period from March 5, 1965, through March 31, 

1965, respondent Harney, Burns Inc. was undersegregated in amounts ranging from 

approximately $ 15,000 on March 26, 1965, to approximately $ 27,000 on March 15, 

1965, that is, the total amount of funds held in segregation, as described in 

paragraph V hereof, was insufficient by such amounts to pay all credits and 

equities due to such customers. In connection therewith, respondent Harney, 

Burns Inc. prepared and maintained false records which purported to show that 

sufficient funds were held in segregated accounts to pay all credits and 

equities due its customers. 

VIII 

On each business day during the period from April 1, 1965, through April 8, 

1965, respondent Harney, Burns Inc. was undersegregated in amounts ranging from 

approximately $ 6,000 on April 8, 1965, to approximately $ 13,000 on April 1, 

1965, that is, the total amount of funds held in segregation, as described in 

paragraph V hereof, was insufficient by such amounts to pay all credits and 

equities due to such customers. During such period, respondent Harney, Burns 

Inc. failed to prepare and maintain a record as of the close of the market on 

each business day of the amount of money, securities and property required to be 

in segregated account in order to pay all credits and equities due to its 

customers. 

IX 

By reason of the act described in paragraph III, respondents Harney, Burns 

Inc. and A. James Comenzo furnished false information in connection with the 

respondent corporation's application for registration as futures commission 

merchant, in wilful violation of Section 4f of the Commodity Exchange Act and 

Section 1.10 of the regulations thereunder. By reason of the acts and omissions 

described in paragraphs VI, VII, and VIII, respondents Harney, Burns Inc., John 

T. Fontana, Robert O. Ingal, and A. James Comenzo failed to treat and deal with 

customers' funds as belonging to such customers, prepared and maintained false 

records, and failed to prepare and maintain records required under 

the Commodity Exchange Act and regulations relating to the treatment of 

customers' funds, in knowing and wilful violation of Sections 4d(2) and 4g of 
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the Commodity Exchange Act and Sections 1.20, 1.21, 1.22, 1.23 and 1.32 of the 

regulations. 

WHEREFORE, it is hereby ordered that this complaint and notice of hearing be 

served upon the said respondents. The respondents will have twenty (20) days 

after the receipt of this notice of hearing in which to file with the Hearing 

Clerk, United States Department of Agriculture, Washington, D. C. 20250, an 

answer with an original and six copies, fully and completely stating the nature 

of the defense and admitting or denying, specifically and in detail, each 

allegation of this complaint. Allegations not answered will be deemed admitted 

for the purpose of this proceeding. Failure to file an answer will constitute 

an admission of all the allegations of this complaint and a waiver of hearing. 

The respondents are hereby notified that unless hearing is waived, either 

expressly or by failure to file an answer, or by filing an answer in which all 

of the material allegations of fact contained in the complaint are admitted and 

a hearing is not requested, a hearing will be held at 10:00 a.m., local time, on 

the 27th day of May, 1965, in New York, New York, at a place therein to be 

specified later, before a referee designated to conduct such hearing. At such 

hearing the respondents will have the right to appear and show cause, if any 

there be, why an order should not be made directing that all contract markets 

refuse all trading privileges to the respondents for such period of time as may 

be 

determined, and suspending or revoking the registration of respondent Harney 

Burns Inc., as a futures commission merchant. 

It is ordered that this complaint and notice of hearing be served on the 

respondents at least twenty (20) days prior to the date set for hearing. 

Done at Washington, D. C. 

April 19 1965 

[SEE SIGNATURE IN ORIGINAL] 

John A. Baker 

Acting Secretary 

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