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Commodity Futures Trading Commission 

CEA CASES 

NAME: SY B. GAIBER & CO., SY B. GAIBER, AND MICHAEL R. HEMPEL 

DOCKET NUMBER: 165 

DATE: FEBRUARY 12, 1970 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Sy B. Gaiber & Co., Sy B. Gaiber, and Michael R. Hempel, Respondents 

CEA Docket No. 165 

Complaint and Notice of Hearing Under the Commodity Exchange Act 

There is reason to believe that the respondents have violated the Commodity 

Exchange Act (7 U.S.C. Chapter 1, 1964 ed., as amended, Supp. IV, 1969) and the 

regulations made pursuant thereto, and in accordance with the provisions of 

sections 6(b) and 6(c) of the said Act (7 U.S.C. 9 and 13b, Supp. IV, 1969), 

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

respect as follows: 

I 

Respondents Sy B. Gaiber and Michael R. Hempel, individuals, are now, and 

were at all times material to this complaint, the sole partners in an Illinois 

partnership doing business under the firm name of Sy B. Gaiber & Co., with 

offices at 343 South Dearborn Street, Chicago, Illinois, 60604. At all times 

material herein up to November 4, 1969, the said partnership, acting in the 

capacity of futures commission merchant under the Commodity Exchange Act, was 

engaged in trading in commodities for future delivery for the accounts of 

customers and holding for such customers sums of money, representing deposits of 

margin by and trading profits accruing to such customers. During the year 1969, 

the said 

partnership was registered as a futures commission merchant under the Commodity 

Exchange Act. In accordance with the provisions of section 4f of the said Act 

(7 U.S.C. 6f, Supp. IV, 1969) and section 1.16 of the regulations thereunder (17 

CFR 1.16), such registration expired on December 31, 1969, and the said 

partnership is not now so registered. 

II 

During the period from March 30 through November 4, 1969, while a registered 

futures commission merchant under the Commodity Exchange Act, respondent Sy B. 

Gaiber & Co. failed to meet the minimum financial requirements prescribed by 

section 1.17 of the regulations (34 F.R. 599) issued by the Secretary of 

Agriculture under the Commodity Exchange Act. Examination of the records of 

respondent Sy B. Gaiber & Co. by the Commodity Exchange Authority disclosed that 

the firm lacked approximately $ 9,000.00 on March 31, 1969, $ 28,000.00 on June 

30, 1969, and $ 55,000.00 on August 4, 1969, of having enough funds to meet such 

minimum financial requirements. 

III 

On July 1, 1969, representatives of the Commodity Exchange Authority, namely, 

Robert P. Piccirillo and Donald G. Smith, visited the office of the respondent 
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partnership and requested information from respondent Sy B. Gaiber as to the 

source of $ 27,000 that had been deposited in the respondent partnership's 

general funds bank account during June 1969, in order that a determination might 

be made with respect to whether the respondent partnership was meeting the 

minimum financial requirements prescribed by section 1.17 of the regulations (34 

F.R. 599) issued under the Commodity Exchange Act. At that time, respondent Sy 

B. Gaiber reported to Messrs. Piccirillo and Smith that the $ 27,000 in 

question had been contributed to the capital of the respondent partnership by 

respondent Michael R. Hempel and his brother William, his sister and father. 

Later, on or about July 10, 1969, the respondents submitted three statements to 

the Commodity Exchange Authority, signed by respondent Michael R. Hempel, 

William Hempel and Jerome P. Chernoff, respectively. According to such 

statements, the $ 27,000 in question consisted of contributions of $ 11,000 from 

respondent Michael R. Hempel, $ 10,000 from William Hempel, and $ 6,000 from 

Jerome P. Chernoff. In truth and in fact and as the respondents knew at the 

time the above information was given to the Commodity Exchange Authority, none 

of the $ 27,000 was received from respondent Michael R. Hempel, only $ 6,000 was 

received from William Hempel and Jerome P. Chernoff, and the remaining $ 21,000 

was advanced by seven different persons in payment of stock to be issued to them 

by Sy B. Gaiber & Co. Inc., a new corporation organized by respondents Sy B. 

Gaiber and Michael R. Hempel. 

IV 

By reason of the facts alleged in this complaint, the respondents wilfully 

violated sections 4f and 6(b) of the Commodity 

Exchange Act (7 U.S.C. 6f and 9, Supp. IV, 1969) and sections 1.17 and 1.35 of 

the regulations issued thereunder (34 F.R. 599, 17 CFR 1.35). 

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

served upon the respondents and this proceeding shall be governed by sections 

0.1, 0.2, 0.4(b), 0.5 through 0.22 and 0.28 of the rules of practice under the 

Commodity Exchange Act (17 CFR 0.1, 0.2, 0.4(b), 0.5 through 0.22, 0.28). 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 four 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 purposes 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 March 25, 1970, 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 appropriate 

order should not be issued in accordance with the Commodity Exchange Act, (1) 

prohibiting the respondents from trading on or subject to the rules of any 

contract market, and directing that all contract markets refuse all trading 

privileges to the respondents for such period of time as may be determined and 

(2) directing that the respondents shall cease and desist from violating the Act 

and regulations in the manner alleged herein. 
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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. 

February 12, 1970 

[SEE SIGNATURE IN ORIGINAL] 

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