Page 1 

Commodity Futures Trading Commission 

CEA CASES 

NAME: A. E. MOOERS CO., INC. AND FRANK H. TOTMAN, SR. 

CITATION: 31 Agric. Dec. 997 

DOCKET NUMBER: 190 

DATE: AUGUST 3, 1972 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 14,714) 

In re A. E. MOOERS CO., INC. and FRANK H. TOTMAN, SR. CEA Docket No. 190. 

Decided August 3, 1972. 

Futures commission merchant -- Minimum financial requirements -- Failure to 

meet -- False financial reports -- Stipulation -- Denial of trading privileges

The respondents have consented to the issuance of an order against them to 

cease and desist from the activities set forth herein and ordering the denial of 

trading privileges to them as set forth herein. 

Earl L. Saunders, for complainant. 

Thomas O. Bither, Houlton, Maine, for respondent. 

Decision by Donald A. Campbell, Judicial Officer

DECISION AND ORDER

PRELIMINARY STATEMENT

This is an administrative proceeding under the Commodity Exchange Act (7 

U.S.C. 1 et seq.), instituted by a complaint and notice of hearing issued on May 

19, 1972, under sections 6(b) and 6(c) of the Act (7 U.S.C. 9 and 13b). The 

respondents are charged with violating sections 4f and 6(b) of the Commodity 

Exchange Act (7 U.S.C. 6f and 9) and section 1.17 of the regulations issued 

under the Act (17 CFR 1.17). 

No hearing has been held in this proceeding. The respondents have filed a 

stipulation under section 0.4(b) of the rules of practice (17 CFR 0.4(b)) in 

which they (1) admit the facts hereinafter set forth in paragraphs 1 and 2 of 

the Findings of Fact, (2) admit, for the purposes of this proceeding and for 

such purposes only, the facts hereinafter set forth in paragraph 3 of the 

Findings of Fact, (3) waive the report of the Hearing Examiner, and (4) consent 

to the entry of the order contained herein. 

FINDINGS OF FACT

1. Respondent A. E. Mooers Co., Inc., is now, and was at all times material 

herein, a corporation organized and existing under the laws of the State of 

Maine, with its offices at 93 Bangor Street, Houlton, Maine 04730. The 

corporation was, at all times material herein, a registered futures commission 

merchant under the Commodity Exchange Act, engaged in trading in commodities for 

future delivery for the accounts of customers and holding for such customers 

sums of money, representing deposits of margins by and trading profits accruing 

to such customers. 

2. Respondent Frank H. Totman, Sr., an individual whose business address is 

the same as that of the corporate respondent, is now, and was at all times 

material herein, President of the corporation and at all such times the 

operations of the corporation were under his direction and control. 
Page 2 

3. During the period from June 30, 1969, through July 26, 1971, the corporate 

respondent, while engaged in business as futures commission merchant under the 

Commodity Exchange Act, failed to meet the minimum financial requirements 

prescribed by section 1.17 of the regulations (17 CFR 1.17) issued by the 

Secretary of Agriculture under section 4f of the Act (7 U.S.C. 6f), and 

concealed such failure by submitting reports to the Commodity Exchange Authority 

on CEA Form 1-FR which purported to show that the respondent corporation met 

such requirements when, in truth and in fact it did not: 

(a) The corporation submitted a financial report on Form 1-FR to the 

Commodity Exchange Authority as of June 30, 1969, signed by respondent Frank H. 

Totman, Sr., which purported to show that its current assets exceeded its 

current liabilities by an amount in excess of $ 93,000 and that it met the 

minimum financial requirements prescribed by section 1.17 of the regulations, 

whereas such was not the case. Analysis of a financial statement of the 

respondent firm as of June 30, 1969, prepared for it by Brooks & Carter, its 

outside certified public accountants, reveals that, when the items shown as 

current assets and current liabilities on such statement are classified in 

accordance with the definitions contained in section 1.17 of the regulations, 

the financial statement showed current liabilities of over $ 240,000 and current 

assets of approximately $ 135,000 which were not shown on the report on Form 1-

FR. Further, the anaysis of the aforesaid financial statement reveals that as 

of June 30, 1969, the 

respondent corporation's current liabilities exceed its current assets by 

approximately $ 14,000. 

(b) The respondent corporation submitted a financial report on Form 1-FR to 

the Commodity Exchange Authority as of December 31, 1969, signed by respondent 

Frank H. Totman, Sr., which purported to show that its current assets totaled 

almost $ 150,000 while its current liabilities were less than $ 50,000, and that 

it met the minimum financial requirements prescribed by section 1.17 of the 

regulatons. Examination of the books and records of the respondent corporation 

by the Commodity Exchange Authority revealed that this report, like the report 

of June 30, 1969, failed to show the respondent firm's true financial condition. 

Although the report showed as a current asset the cash surrender value of life 

insurance policies in an amount of $ 56,472.16, it did not show that such 

policies had been assigned to the Houlton Trust Company as collateral for an 

indebtedness of $ 47,568.50. Further, the report showed as the respondent 

firm's total current liabilities money borrowed amounting to only $ 47,532, 

whereas the firm's books showed that as of December 31, 1969, it had current 

liabilities consisting of money owed to the Houlton Trust Company of 

approximately $ 84,000 and owed to the First National Bank of Houlton, $ 25,000, 

a total of about $ 109,000. 

(c) The respondent corporation submitted a financial report on Form 1-FR to 

the Commodity Exchange Authority as of June 30, 1970, signed by respondent Frank 

H. Totman, Sr., which purported to show that its current assets exceeded its 

current liabilities by approximately $ 50,000 and that it met the minimum 

financial requirements prescribed by section 1.17 of the regulations, whereas 

such was not the case. Analysis of the financial statement of the respondent 

corporation as of June 30, 1970, prepared for the firm by the aforementioned 

accounting firm of Brooks & Carter reveals that, when the items shown as current 

assets and current liabilities on such statement are classified in accordance 

with the definitions contained in section 1.17 of the regulations, the financial 

statement showed current liabilities of approximately $ 219,000 and current 

assets of approximately $ 51,000 which were not shown on the report on Form 1-

FR. Further, the analysis of the aforesaid financial statement reveals that as 

of June 30, 1970, the respondent corporation's current liabilities exceeded its 

current assets by almost $ 118,000. 
Page 3 

(d) The respondent corporation submitted a financial report on Form 1-FR to 

the Commodity Exchange Authority as of December 31, 1970, signed by respondent 

Frank H. Totman, Sr., which purported to show that its current assets totaled 

approximately $ 88,000 while its current liabilities totaled only $ 36,000, and 

that it met the minimum financial requirements prescribed by section 1.17 of the 

regulations. Examination of the books and records of the respondent corporation 

by the Commodity Exchange Authority revealed that this report, like the reports 

of June 30, 1969, December 31, 1969, and June 30, 1970, failed to show the 

firm's true financial condition. Although the report showed as a current asset 

the cash surrender value of life insurance policies in an amount of $ 60,751.91, 

it did not show that such policies had been assigned to the New York Life 

Insurance Company as collateral for an indebtedness of approximately $ 53,500. 

Further, the report showed as the respondent firm's total current liabilities 

money borrowed amounting to only $ 36,000, whereas the firm's books showed that 

as of December 31, 1970, it had current liabilities consisting of money borrowed 

from the New York Life Insurance Company, Houlton Trust Company, Summers 

Fertilizer Co., Inc., Corenco Corporation and the First National Bank of 

Houlton, totaling approximately $ 206,000. 

(e) Examination of the respondent corporation's books and records by the 

Commodity Exchange Authority as of May 28, 1971, revealed that as of such date 

the firm's current liabilities exceeded its current assets by approximately $ 

136,000. 

CONCLUSIONS

By reason of the facts set forth in the Findings of Fact, it is concluded 

that, as charged in the complaint, the resondents violated section 4f and 6(b) 

of the Commodity Exchange Act (7 U.S.C. 6f and 9) and section 1.17 of the 

regulations issued under the Act (17 CFR 1.17). The complainant states that the 

administrative officials of the Commodity Exchange Authority have carefully 

considered the stipulation submitted by the respondents. The administrative 

officials believe that the prompt entry of the proposed order would constitute a 

satisfactory disposition of this case, serve the public interest and effectuate 

the purposes of the Act. The complainant recommeds that the stipulation be 

accepted and the proposed order be issued. It is concluded that the 

complainant's recommendation should be adopted. 

ORDER

The respondents, A. E. Mooers, Co., Inc., and Frank Totman, Sr., are 

prohibited from trading on or subject to the rules of any contract market for a 

period of eighteen months and all contract markets shall refuse all trading 

privileges to the said respondents during this period. Such prohibition and 

refusal shall apply to all trading done and positions held directly by the said 

respondents or either of them, either for their own accounts or as the agents or 

representatives of any other person or firm, and also to all trading done and 

positions held indirectly through persons or firms owned or controlled by the 

said respondents or any of them, or othrwise. This order shall not apply to the 

respondents acting as agent for F. J Reardon Company in accepting orders and 

margins and transferring said orders and margins to said firm in which capacity 

they have acted since resigning as a Clearing House Member on July 26, 1971. 

The respondents, and each of them, shall cease and desist from: 

(1) Engaging as futures commission merchant within the meaning of the 

Commodity Exchange Act without meeting the minimum financial requirements of the 

Act and the regulations thereunder; 

(2) Willfully making any material false or misleading statement in any report 

or application filed under the Commodity Exchange Act; 

(3) Willfully omitting to state any material fact in connection with any such 

application or report; 
Page 4 

(4) Willfully causing, aiding, counselling, commanding or inducing any person 

to engage in any act or practice from which the respondents are directed to 

cease and desist by this order. 

The period of the denial of trading privileges to the resspondents, specified 

in the first paragraph of this order, shall become effective on the 30th day 

after the date of this order. The cease and desist provisions of this order, 

set forth in the second paragraph of this order, shall become effective on the 

date of service of this order upon the respondents. 

A copy of this decision and order shall be served upon each of the parties 

and on each contract market. 

LOAD-DATE: June 9, 2008 
Page 5