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Commodity Futures Trading Commission 

CEA CASES 

NAME: ARTHUR N. ECONOMOU, AND ARTHUR N. ECONOMOU & CO., INC. 

DOCKET NUMBER: 167 

DATE: JUNE 20, 1970 

DOCUMENT TYPE: AMENDED COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Arthur N. Economou, and Arthur N. Economou & Co., Inc., Respondents 

CEA Docket No. 167 

Amended 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. 1964 ed., Chapter 1, as amended, Supp. IV, 1969), and the 

regulations of the Secretary of Agriculture thereunder, and that respondent 

Arthur N. Economou & Co., Inc., does not meet the minimum financial requirements 

of the said act and regulations. In accordance with the provisions of sections 

6(b), 6(c) and 8a of the Commodity Exchange Act (7 U.S.C. 9, 13b, 12a, Supp. IV, 

1969), this amended complaint and notice of hearing is issued alleging as 

follows: 

I 

Respondent Arthur N. Economou is an individual whose business address is 286 

Fifth Avenue, New York, New York 10001. 

II 

Respondent Arthur N. Economou & Co., Inc., a Delaware corporation with its 

office and place of business at 286 Fifth Avenue, New York, New York 10001, is 

now and was at all times material herein, registered as a futures commission 

merchant under the Commodity Exchange Act. At all times material herein, 

respondent Arthur N. Economou was in complete control of the respondent 

corporation and initiated and carried out the acts, dealings and transactions of 

the corporation. At all such times up to on or about March 31, 1970, the 

corporate respondent, acting in the capacity of futures commission merchant 

under the Commodity Exchange Act, held for its customers sums of money, 

representing deposits of margin by and trading profits accruing to such 

customers. 

III 

The respondent corporation presently fails 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 section 4f of the Commodity Exchange Act 

(7 U.S.C. 6f, Supp. IV, 1969), and at all times during the period from on or 

about March 31, 1969 through on or about March 31, 1970, while engaged in 

business as futures commission merchant under the Commodity Exchange Act, failed 

to meet such requirements: 

(A) Respondents submitted financial reports on Form 1-FR to the Commodity 

Exchange Authority as of March 31, 1969, June 30, 1969, and December 31, 1969, 

respectively, which included among the "current assets" the following: 

Report as of March 31, 1969 
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(1) Due from Arthur N. Economou . . . $ 2,000.00 (Secured by pledge of GTO 

Pontiac automobile valued at $ 2,500.00) 

(2) Due from the American Association of Commodity Traders . . . $ 9,626.81 

(Secured by inventory of Association publications value appraised conservatively 

at $ 15,000.00) 

(3) OTHER CURRENT ASSETS . . . 'acquisition cost', in the Economou Precious 

Metals Futures Trading Syndicate . . . $ 6,016.80 

Report as of June 30, 1969 

(1) Due from American Board of Trade $ 846.00 

(2) Due from Arthur N. Economou (Secured by pledge of GTO Pontiac automobile 

valued at $ 2,500.00) $ 2,000.00 

(3) Due from the American Association of Commodity Traders (Secured by 

inventory of Association publications, value appraised conservatively at $ 

15,000.00) $ 7,080.81 

(4) Contract acquisition: 

Economou Precious Metals Futures Trading Syndicate $ 9,304.97 

Economou Grain Futures Trading Syndicate $ 23.00 

Report as of December 31, 1969 

(1) Due from Arthur N. Economou $ 1,000.00 (Secured by pledge of GTO Pontiac 

automobile valued at 1,500) 

(2) Due from the American Association of Commodity Traders (Secured by 

inventory of Association publications, value appraised conservatively at $ 

18,000) $ 4,477.31 

(3) Contract acquisition: 

Economou Precious Metals Futures Trading Syndicate $ 8,089.53 

Economou Grain Futures Trading Syndicate $ 1,881.28 

In truth and in fact, none of the items specified above qualified as current 

assets within the meaning of that term as used in section 1.17 of the 

regulations (34 F.R. 599) issued under the Commodity Exchange Act. When such 

items are deducted from the respondents' "current assets", they lacked 

approximately $ 6,000,00 as of March 31, 1969, $ 700.00 as of June 30, 1969, and 

$ 13,000 as of December 31, 1969, of having enough funds to meet the minimum 

financial requirements prescribed by the above-cited section of the regulations. 

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

Commodity Exchange Authority as of March 31, 1970, revealed that the 

corporation's current liabilities exceeded its current assets by $ 14,893.38, 

and that it lacked $ 24,893.38 of having enough funds to meet the minimum 

financial requirements prescribed by the above-cited section of the regulations. 

The examination revealed that as of March 31, 1970, the respondent corporation's 

current assets and current liabilities were as follows: 

 

Current Assets Current Liabilities 

Accounts payable $ 1,103.49

Payroll taxes 245.73

Cash $ 603.31 Due Economou 

Interest receivable 75.00 Financial and 

Funds in Development Corp. 13,621.51

segregation $ 10,954.94 Due customers 11,555.90

 Totals $ 11,633.25 $ 26,526.63

IV 
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By reason of the facts alleged in this complaint, the respondent corporation 

does not meet the minimum financial requirements under section 4f of the 

Commodity Exchange Act (7 U.S.C. 6f, Supp. IV, 1969), and the respondents 

willfully violated section 4f of the Act and section 1.17 of the regulations 

issued thereunder (34 F.R. 599). 

WHEREFORE, it is hereby ordered that this amended 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 

amended 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 amended complaint and a 

waiver of hearing. The filing of an answer in which all of the material 

allegations of fact contained in the amended 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 August 5, 1970, 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 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, (2) directing that the respondents shall 

cease and desist from violating the Commodity Exchange Act and regulations in 

the manner alleged herein, and (3) suspending or revoking the registration of 

respondent Arthur N. Economou & Co., Inc., as futures commission merchant. 

It is ordered that this amended 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. 

June 20, 1970 

[SEE SIGNATURE IN ORIGINAL] 

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