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Commodity Futures Trading Commission 

CEA CASES 

NAME: SECRETARY OF AGRICULTURE V. S. W. GONGOLL, S. W. GONGOLL & COMPANY, 

GENERAL EQUITIES, INC., FINANCIAL DISTRIBUTORS, FINANCIAL ASSOCIATES OF 

ILLINOIS, INC., FINANCIAL ASSOCIATES OF MINNESOTA, INC., FINANCIAL ASSOCIATES OF 

FLORIDA, INC., FINANCIAL ASSOCIATES OF SOUTH DAKOTA, INC., AND UNIT PLAN TRADING 

COMPANY 

DOCKET NUMBER: 7 

DATE: AUGUST 25, 1938 

DOCUMENT TYPE: COMPLAINT 

DEPARTMENT OF AGRICULTURE 

Washington, D. C. 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

C. E. A. DOCKET NO. 7. 

Secretary of Agriculture, Complainant, v. S. W. Gongoll, S. W. Gongoll & 

Company, General Equities, Inc., Financial Distributors, Financial Associates of 

Illinois, Inc., Financial Associates of Minnesota, Inc., Financial Associates of 

Florida, Inc., Financial Associates of South Dakota, Inc., and Unit Plan Trading 

Company, Respondents. 

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

The Secretary of Agriculture has reason to believe that the respondents 

hereinafter named have violated and are violating the Commodity Exchange Act (7 

U. S. C. and Supp. III, Secs. 1-17a) and the rules and regulations promulgated 

pursuant thereto, and therefore issues this complaint, alleging the following: 

1. 

S. W. Gongoll is an individual whose business address is Foshay Tower, 

Minneapolis, Minnesota. 

S. W. Gongoll & Company is a corporation whose business address is 200 Foshay 

Tower, Minneapolis, Minnesota. 

General Equities, Inc., is a corporation whose business address is 200 Foshay 

Tower, Minneapolis, Minnesota. 

Financial Distributors, Inc., is a corporation whose business address is 200 

Foshay Tower, Minneapolis, Minnesota. 

Financial Associates of Illinois, Inc., is a corporation whose business 

address is 135 South La Salle Street, Chicago, Illinois. 

Financial Associates of Minnesota, Inc., is a corporation whose business 

address is 200 Foshay Tower, Minneapolis, Minnesota. 

Financial Associates of Florida, Inc., is a corporation whose business 

address is 200 Foshay Tower, Minneapolis, Minnesota. 

Financial Associates of South Dakota, Inc., is a corporation whose business 

address is 200 Foshay Tower, Minneapolis, Minnesota. 

Unit Plan Trading Company is a corporation whose business address is 200 

Foshay Tower, Minneapolis, Minnesota. 
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2. 

On or about August 2, 1937, and continuously to August 26, 1937, S. W. 

Gongoll, acting by and through the other respondents named herein, and by and 

through himself, and by accounts controlled 

by himself, held and controlled open contracts in a single future of one of the 

commodities defined as grain in the said rules and regulations, on one contract 

market, totalling more than 200,000 bushels; and on January 7, 1938, acting as 

aforesaid, held and controlled open contracts in the May wheat future on the 

Board of Trade of the City of Chicago, a contract market, totalling 200,000 

bushels or more, and failed to report such holdings to the Commodity Exchange 

Administration on form 203, as required by the rules and regulations made and 

promulgated pursuant to the Commodity Exchange Act. 

3. 

On numerous other occasions during the last five months of 1937 and during 

1938, the said S. W. Gongoll, acting by and through the other respondents named 

herein, and by and through himself, has held and controlled open contracts in a 

single future of one of the commodities defined as grain in said rules and 

regulations, on one contract market, totalling more than 200,000 bushels, 

without reporting to said Commodity Exchange Administration on form 203 as 

required by said rules and regulations. 

4. 

On August 2, 1937, and on various dates thereafter, up to 

and including October 7, 1937, the said S. W. Gongoll, acting by and through one 

or more of the other respondents named herein, held or controlled open contracts 

in a single future of one or more of the commodities defined as grain in said 

rules and regulations, on one contract market, totalling more than 200,000 

bushels, and at such times filed reports with the Commodity Exchange 

Administration on form 203, as required by said rules and regulations, which 

reports did not truly and correctly show for the dates covered thereby the 

amount of open contracts held or controlled by him, or the amount of such grain 

bought and the amount sold by him individually or by or through the other 

respondents for future delivery, all in violation of the rules and regulations 

promulgated pursuant to the Commodity Exchange Act. 

5. 

Respondent S. W. Gongoll, through various connections with each of the other 

named respondents, has controlled at all times hereinbefore named, and continues 

to control the futures trading of each and all of the respondents herein in said 

commodities, and has controlled at said times and continues to control the 

futures positions of each and all of the respondents herein in said commodities, 

on all contract markets. 

6. 

During the last five months of 1937, and during 1938, each and every one of 

the respondents named herein has for part of said period or continuously engaged 

as futures commission merchant in soliciting orders and accepting orders for the 

purchase and sale of the said commodities for future delivery and involving 

contracts of sale of said commodities for future delivery on and subject to the 

rules of contract markets, accepting money, securities, and property, and 

extending credit, in connection with such solicitation and acceptance of orders, 

without having registered with the Secretary of Agriculture as such futures 

commission merchant, and without segregating the funds of customers as required 

by the Commodity Exchange Act. 
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7. 

One of the plans under which the respondents operate consists of respondent's 

entering into a "joint fund agreement" with a customer, whereunder respondent 

adds ten percent to the sum received from the customer, opens and controls a 

trading account in the above-described commodities and in other commodities and 

securities, receives forty percent of any profits from said account, and is 

liable for losses to the extent of its one-eleventh contribution. 

Various other plans and devices have been and are employed by 

each of respondents, the exact nature of all of which is not known, but it is 

alleged that under each of such devices used by any respondent, such respondent 

is acting as a futures commission merchant and is subject to the terms of the 

Commodity Exchange Act and the rules and regulations thereunder. All of said 

plans are not known because respondents have refused to allow representatives of 

the Commodity Exchange Administration to examine their books and records so that 

the exact nature of their commodity futures business could be ascertained. 

8. 

On or about July 7, 1938, S. W. Gongoll and the other respondents herein 

failed and refused, and they continue to fail and refuse, to keep their books 

and records pertaining to futures transactions in said commodities open to 

inspection by representatives of the United States Department of Agriculture, as 

provided by the Commodity Exchange Act and the rules and regulations promulgated 

pursuant to said act. 

Therefore, each of the said respondents is hereby notified to be and appear 

at a hearing to be held at 10 o'clock a.m. on September 14, 1938, in Room 208, 

United States Court House, Marquette Avenue and Third Street, Minneapolis, 

Minnesota, before a referee to be 

designated by the Secretary of Agriculture to conduct such hearing, and then and 

there show cause, if any there be, why an order should not be made directing 

that all contract markets until further notice of the Secretary of Agriculture 

refuse all trading privileges to each of such respondents, respectively. 

IT IS ORDERED That this complaint and notice of hearing be served on each of 

the named respondents, by delivery of a true copy hereof to each of them, by an 

employee of the Department of Agriculture or by registered mail at least three 

days prior to the date herein set for hearing. 

(SEAL) 

IN WITNESS WHEREOF, the Secretary of Agriculture has hereunto set his hand 

and caused the official seal of the Department of Agriculture to be affixed in 

the City of Washington on the 25th day of August, 1938. 

/s/ H. A. Wallace 

Secretary of Agriculture 

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