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Commodity Futures Trading Commission 

CEA CASES 

NAME: RUBIN EHRLICH 

DOCKET NUMBER: 126 

DATE: MARCH 26, 1965 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Rubin Ehrlich, Respondent 

CEA Docket No. 126 

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

Act 

There is reason to believe that the respondent, Rubin Ehrlich, has violated 

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

The respondent, Rubin Ehrlich, is an individual whose address is 3616 Henry 

Hudson Parkway, Bronx, New York, New York. The respondent is now and was at all 

times material herein a member of the New York Mercantile Exchange. The 

respondent was at all times material herein a registered floor broker under the 

Commodity Exchange Act and President of All State Commodity Traders, Inc., a 

registered futures commission merchant under the Commodity Exchange Act. 

II 

The New York Mercantile Exchange is now and was at all times material herein 

a duly designated contract market under the Commodity Exchange Act. 

III 

The futures transactions referred to in this complaint relate to the purchase 

and sale of Maine-grown Irish potato futures contracts on the New York 

Mercantile Exchange, each of which contracts calls for the delivery of 50,000 

pounds of such potatoes. Such contracts could have been used for (a) hedging 

transactions in interstate commerce in potatoes or the products or byproducts 

thereof, (b) determining the price basis of transactions in inter-state commerce 

in potatoes, and (c) delivering potatoes sold, shipped, or received in 

interstate commerce for the fulfillment of such futures contracts. 

IV 

During the period from March 13, 1964, through April 28, 1964, the 

respondent, in his capacity as floor broker, executed trades in potato futures 

on the New York Mercantile Exchange. During such period, the respondent 

allocated certain of such trades between his own account and those customers' 

accounts which the respondent personally handled and traded on a discretionary 

basis. 

V 

During the period from March 13, 1964, through April 28, 1964, the 

respondent, in allocating between himself and his customers the trades referred 
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to in paragraph IV above, followed the practice of usually allocating to himself 

contracts purchased at prices lower 

than the average price of all purchases which the respondent allocated between 

himself and his customers on the date of such purchases, and usually allocating 

to himself contracts sold at prices higher than the average price of all sales 

which the respondent allocated between himself and his customers on the date of 

such sales. This practice resulted in the contracts being allocated between the 

respondent and his customers as follows: 

Number of Contracts 

Allocated 

Purchases Sales 

To To To To 

Himself Customers Himself Customers

Contracts at better than average prices 181 28 72 37 Contracts at poorer than average prices 40 118 30 159

 Contracts at average prices 5 5 1 13

Total 226 151 103 209

VI 

By reason of the facts set forth in this complaint, the respondent attempted 

to deceive, cheat and defraud, and did deceive, cheat and defraud his customers 

in violation of section 4b of the Commodity Exchange Act (7 U.S.C. 6b). 

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

served upon the said respondent. The respondent 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 three 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 

respondent is 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 25th 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 respondent 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 respondent for such period of time as may 

be determined. 

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

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

Done at Washington, D. C. 

March 26 1965 

[SEE SIGNATURE IN ORIGINAL] 

George L. Mehren 

Assistant Secretary 
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