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Commodity Futures Trading Commission 

CEA CASES 

NAME: RAYMOND A. GERSTENBERG, RAYMOND M. GERSTENBERG, GERSTENBERG & CO., AND 

JOHN W. DICKSON, JR. 

DOCKET NUMBER: 141 

DATE: NOVEMBER 18, 1966 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Raymond A. Gerstenberg, Raymond M. Gerstenberg, Gerstenberg & Co., and 

John W. Dickson, Jr., Respondents 

CEA Docket No. 141 

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

Act 

There is reason to believe that the respondents named herein have violated 

the provisions of the Commodity Exchange Act (7 U.S.C. 1 et seq.), and the rules 

and regulations issued thereunder (17 CFR, Part I). In accordance with the 

provisions of section 6(b) of the Commodity Exchange Act (7 U.S.C. 9), this 

complaint and notice of hearing is issued stating the charges in that respect as 

follows: 

I 

Respondents Raymond A. Gerstenberg and Raymond M. Gerstenberg, individuals, 

are now and were at all times material herein members of a partnership doing 

business under the firm name of Gerstenberg & Co., with offices and a place of 

business at Room 763, 141 West Jackson Boulevard, Chicago, Illinois. The said 

partnership is now and was at all times material herein a registered futures 

commission 

merchant under the Commodity Exchange Act and a clearing member of the Chicago 

Board of Trade. Each of the said individual respondents is now and was at all 

times material herein a member of the Chicago Board of Trade, and respondent 

Raymond M. Gerstenberg is now and was at all such times a registered floor 

broker under the Commodity Exchange Act. 

II 

Respondent John W. Dickson, Jr., an individual whose business address is Room 

1169, 141 West Jackson Boulevard, Chicago, Illinois, is now and was at all times 

material herein a member of the Chicago Board of Trade. 

III 

The Chicago Board of Trade (Board of Trade of the City of Chicago) is now and 

was at all times material herein a duly designated contract market under the 

Commodity Exchange Act. The transactions referred to in this complaint relate 

to contracts for the purchase and sale of commodity futures on the Chicago Board 

of Trade. Such contracts were capable of being used for hedging transactions in 

interstate commerce in such commodities or the products or byproducts thereof, 

or for determining the price basis of transactions in interstate commerce in 

such commodities or the products or byproducts thereof, or for delivering such 

commodities sold, shipped, or received in interstate commerce. 
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IV 

On the dates hereinafter listed, respondent Raymond A. Gerstenberg entered 

into, and confirmed the execution of, fictitious transactions in commodity 

futures, in that the said respondent prepared and turned in to respondent 

Gerstenberg & Co. trading cards purporting to show that the following 

transactions had been executed, when, in truth and in fact, no such transactions 

had been executed. 

100> >101> 

Price 

Date Quantity (Cents per 

1965 Commodity Future (Bushels) Bushel) 

2/16 corn March 20,000 127-5/8 

2/16 corn July 20,000 15,000 at 

131-1/2 and 

5,000 at 

131-3/8 

2/18 corn July 15,000 131-1/2 

2/19 corn March 10,000 127-1/2 

2/19 corn July 15,000 131-1/2 

2/25 corn May 5,000 129-1/2 

2/26 corn May 5,000 129-3/4 

2/26 corn March 5,000 126-3/4 

3/2 soybeans May 175,000 306 

3/2 soybeans July 175,000 306 

3/5 oats September 5,000 67 

3/15 corn September 35,000 128-7/8 

3/22 oats July 15,000 66-1/4 

3/22 oats September 15,000 67 

5/3 oats May 5,000 72-1/4 

5/3 corn July 5,000 134-1/8 

5/20 oats December 10,000 70 

7/9 corn September 20,000 125-3/8 

7/9 corn July 10,000 129 

7/13 corn July 10,000 127 

7/13 corn September 25,000 124-3/4 

7/26 soybeans August 10,000 278-1/4 

7/26 soybeans November 10,000 250-1/4 

Date 1965 Commodity Purchaser Seller 

2/16 corn Gerstenberg & Co. Raymond A. Gerstenberg 

2/16 corn Raymond A. Gerstenberg Gerstenberg & Co. 

2/18 corn Raymond M. Gerstenberg Raymond A. Gerstenberg 

2/19 corn Raymond A. Gerstenberg Gerstenberg & Co. 

2/19 corn Raymond A. Gerstenberg Gerstenberg & Co. 

2/25 corn Gerstenberg & Co. Raymond A. Gerstenberg 

2/26 corn Gerstenberg & Co. Raymond A. Gerstenberg 

2/26 corn Raymond A. Gerstenberg Gerstenberg & Co. 

3/2 soybeans * Raymond A. Gerstenberg 

3/2 soybeans Raymond A. Gerstenberg * 

3/5 oats Gerstenberg & Co. Raymond A. Gerstenberg 

3/15 corn Raymond A. Gerstenberg * 

3/22 oats Gerstenberg & Co. Raymond A. Gerstenberg 

3/22 oats Raymond A. Gerstenberg Gerstenberg & Co. 

5/3 oats Gerstenberg & Co. Raymond M. Gerstenberg 

5/3 corn Raymond M. Gerstenberg Gerstenberg & Co. 

5/20 oats Raymond A. Gerstenberg Gerstenberg & Co. 

7/9 corn Raymond A. Gerstenberg Gerstenberg & Co. 

7/9 corn Gerstenberg & Co. Raymond A. Gerstenberg 

7/13 corn Gerstenberg & Co. Raymond M. Gerstenberg 

7/13 corn Raymond A. Gerstenberg Gerstenberg & Co. 

7/26 soybeans * Raymond A. Gerstenberg 

7/26 soybeans Raymond A. Gerstenberg * 
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( * a person not a respondent herein) 

V 

On August 25, 1965, respondent Raymond A. Gerstenberg received for execution 

an order to purchase 15,000 bushels of September oat futures for the account of 

a customer of respondent Gerstenberg & Co. Respondent Raymond A. Gerstenberg 

bucketed the said order by taking the sale side thereof for his own account. To 

accomplish this, respondent Raymond A. Gerstenberg prepared and turned in to 

respondent Gerstenberg & Co. (1) a trading card purporting to show the purchase 

from Gerstenberg & Co. of 15,000 bushels of September oat futures at 66 cents 

per bushel for the account of the customer, and (2) a trading card purporting to 

show the sale to Gerstenberg & Co. of the same quantity of the same future and 

at the same price for respondent Raymond A. Gerstenberg's own account. 

VI 

On September 10, 1965, respondent Raymond A. Gerstenberg received for 

execution an order to purchase 10,000 bushels of December oat futures for the 

account of a customer of respondent Gerstenberg & Co. Respondent Raymond A. 

Gerstenberg bucketed the said order by taking the sale side thereof for his own 

account. To accomplish this, respondent Raymond A. Gerstenberg prepared and 

turned in to respondent Gerstenberg & Co. (1) a trading card purporting to show 

the purchase from Gerstenberg & Co. of 10,000 bushels of December oat futures at 

67-1/2 cents per bushel for 

the account of the customer, and (2) a trading card purporting to show the sale 

to Gerstenberg & Co. of the same quantity of the same future and at the same 

price for respondent Raymond A. Gerstenberg's own account. 

VII 

With respect to the transactions referred to in paragraphs IV, V and VI 

above, respondent Gerstenberg & Co. (1) showed on its books and records that the 

transactions had been executed, and (2) kept the trading cards prepared by 

respondent Raymond A. Gerstenberg as a part of the records of the said firm and 

as a record of respondent Raymond A. Gerstenberg. 

VIII 

On March 8, 1965, respondent Raymond M. Gerstenberg received for execution an 

order to sell two tank cars of July soybean oil futures for the account of a 

customer of respondent Gerstenberg & Co. Respondent Raymond M. Gerstenberg 

bucketed the said order by taking the purchase side thereof for his own account. 

To accomplish this, respondent Raymond M. Gerstenberg prepared and turned in to 

respondent Gerstenberg & Co. (1) a trading card purporting to show the sale to 

Gerstenberg & Co. of two tank cars of July soybean oil futures at 11.95 cents 

per pound for the account of the customer, and (2) a trading card purporting to 

show the purchase from Gerstenberg & Co. of the same quantity of the same future 

and at the same price for respondent Raymond M. Gerstenberg's own account. 

IX 

On December 20, 1965, respondent Raymond M. Gerstenberg received for 

execution an order to purchase 10,000 bushels of March corn futures for the 

account of a customer of Illinois Cooperative Futures Co., a clearing member of 

the exchange. Respondent Raymond M. Gerstenberg bucketed the said order by 

taking the sale side thereof for his own account. To accomplish this, 

respondent Raymond M. Gerstenberg (1) prepared and turned in to Illinois 

Cooperative Futures Co. a trading card purporting to show the purchase from John 

W. Dickson, a clearing member of the exchange, of 10,000 bushels of March corn 

futures at $ 1.24-1/2 per bushel for the account of the customer, and (2) 
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prepared and turned in to John W. Dickson a trading card purporting to show the 

sale to Illinois Cooperative Futures Co. of the same quantity of the same future 

and at the same price for respondent Raymond M. Gerstenberg's own account at 

John W. Dickson. 

X 

On July 19, 1965, respondent Raymond M. Gerstenberg received for execution an 

order to purchase 10,000 bushels of August soybean futures for the account of a 

customer of respondent Gerstenberg & Co. Respondent Raymond M. Gerstenberg 

bucketed the said order by taking the sale side thereof for his own account. 

The bucketing of the said order was accomplished as follows: (1) Respondent 

Raymond M. Gerstenberg prepared and turned in to respondent 

Gerstenberg & Co. a trading card purporting to show the purchase from 

Gerstenberg & Co. of 5,000 bushels of August soybean futures at $ 2.73 per 

bushel for the account of the customer, and the purchase from John W. Dickson of 

the same quantity of the same future and at the same price for the account of 

the customer; (2) Respondent Raymond M. Gerstenberg prepared and turned in to 

respondent Gerstenberg & Co. another trading card purporting to show the sale to 

that firm of 5,000 bushels of August soybean futures at $ 2.73 per bushel for 

respondent Raymond M. Gerstenberg's own account; and (3) Respondent John W. 

Dickson, Jr., acting on the instructions of respondent Raymond M. Gerstenberg, 

prepared and turned in to John W. Dickson a trading card purporting to show the 

sale to respondent Gerstenberg & Co. of 5,000 bushels of August soybean futures 

at $ 2.73 per bushel for the account of Raymond M. Gerstenberg at John W. 

Dickson. 

XI 

With respect to the transactions referred to in paragraphs VIII, IX and X, 

respondent Gerstenberg & Co. (1) showed on its books and records that the 

transactions had been executed, and (2) kept the trading cards prepared by 

respondent Raymond M. Gerstenberg as a part of the records of the said firm and 

as a record of respondent Raymond M. Gerstenberg. 

XII 

On July 13, 1965, respondent Gerstenberg & Co., having received an order to 

sell 15,000 bushels of July corn futures, wilfully and knowingly, and without 

the prior consent of its customer, became the buyer in respect to the selling 

order of such customer. In filling the said order, respondent Raymond M. 

Gerstenberg, acting as selling floor broker, sold 15,000 bushels of July corn 

futures at $ 1.27 per bushel for the customer's account to respondent Raymond A. 

Gerstenberg who, acting as buying floor broker, made the corresponding purchase 

for the corn hedge account of respondent Gerstenberg & Co. Neither of the said 

individual respondents prepared a trading card with respect to such transaction 

which showed his own name and identified the opposite floor broker with whom the 

transaction was executed. 

XIII 

By reason of the facts alleged in this complaint: (1) respondents Raymond A. 

Gerstenberg and Raymond M. Gerstenberg entered into, and confirmed the execution 

of, transactions which were fictitious sales, and bucketed customers' orders, in 

wilful violation of sections 4b and 4c of the Commodity Exchange Act (7 U.S.C. 

6b, 6c); (2) respondent Gerstenberg and Co. knowingly, and without the prior 

consent of its customer, became the buyer in respect to the selling order of 

such customer, in wilful violation of section 4b of the Act; (3) respondent John 

W. Dickson, Jr., entered into, 
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and confirmed the execution of, a transaction which was a fictitious sale, in 

wilful violation of section 4c of the Act; and (4) each of the respondents 

prepared and kept false and incomplete records of futures transactions in wilful 

violation of section 4g of the Act and section 1.35 of the regulations (7 U.S.C. 

6g; 17 CFR 1.35). 

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 complaint 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 

filing of an answer in which all of the material allegations of fact contained 

in the complaint are admitted likewise shall constitute a waiver of hearing 

unless a hearing is requested. The respondents are hereby notified that unless 

hearing is waived, a hearing will be held at 10:00 a.m., local time, on January 

18, 1967, in Chicago, Illinois, 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 suspending or revoking the 

registration of respondent Raymond M. Gerstenberg as floor broker, suspending or 

revoking the registration of respondent Gerstenberg & Co. as futures commission 

merchant, and directing that all contract markets refuse all trading privileges 

to each respondent for such period of time as may be determined. 

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

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

hearing. 

Done at Washington, D. C. 

November 18, 1966. 

[SEE SIGNATURE IN ORIGINAL] 

Assistant Secretary 

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