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Commodity Futures Trading Commission 

CEA CASES 

NAME: GOFFE & CARKENER, INC., A. VINCENT BLACKFORD AND DWIGHT H. WILLIAMS 

CITATION: 32 Agric. Dec. 1643 

DOCKET NUMBER: 188 

DATE: OCTOBER 15, 1973 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 15,488) 

In re GOFFE & CARKENER, INC., A. VINCENT BLACKFORD and DWIGHT H. WILLIAMS. CEA 

Docket No. 188. Decided October 15, 1973. 

Financial reports -- False statements made in -- Customer's funds -- Improper 

use of -- Denial of trading privileges to all respondents for 60 days -- 

Suspension of Goffee & Carkener, Inc., for 60 days

Where respondents wilfully made false statements in a financial report and 

the corporate respondent improperly used its customers' funds, respondents are 

denied trading privileges for a period of 60 days and the corporate respondent 

is suspended as a registrant under the Act for a period of 60 days. 

Earl L. Saunders, for complainant. 

Albert W. Thompson, Kansas City, Missouri, for respondents. 

Decision by John G. Liebert, Administrative Law Judge.

DECISION AND ORDER PRELIMINARY STATEMENT

This is an administrative proceeding under the Commodity Exchange Act (7 

U.S.C. 1 et seq., hereinafter referred to as the "Act"), which was instituted by 

a complaint and notice of hearing filed by the Under Secretary of Agriculture on 

December 17, 1971. The complaint alleges that the corporate Respondent, a 

registered futures commission merchant under the Act, improperly used securities 

deposited with it by its customers as collateral for a bank loan and that 

Repondents willfully made material false statements in a financial report 

submitted to the Commodity 

Exchange Authority by Respondent corporation in violation of sections 4d and 

6(b) of the Act (7 U.S.C. 6d and 9) and sections 1.20 and 1.30 of the 

Regulations issued pursuant thereto (17 CFR 1.20 and 1.30). The individual 

Respondents were joined in the action as President and Secretary-Treasurer, 

respectively, of the corporate Respondent and as such were responsible for the 

management, direction and control of the corporate Respondent. 

Respondents filed an answer on January 20, 1972, which, in substance, denied 

the allegations in the complaint and denied the alleged violations of the Act 

and Regulations. 

Oral hearing on the matter was held on February 17, 18, and April 6, 1972, in 

Kansas City, Missouri, before Hearing Examiner John G. Liebert, Referee. 

Complainant was represented by Earl L. Saunders, Esq., and John Broadley, Esq., 

Office of General Counsel, United States Department of Agriculture, Washington, 

D.C. Respondents were represented by Clem W. Fairchild, Esq., and David R. 

Dill, Esq., of Linde, Thomson, Van Dyke, Fairchild and Langworthy, Columbia 
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Union Bank Building, Kansas City, Missouri. The final brief in this matter was 

filed on August 11, 1972. 

FINDINGS OF FACT

1. Respondent Goffe & Carkener, Inc., is a corporation organized and existing 

under the laws of the State of Missouri, with offices at 4800 Main Street, 

Kansas City, Missouri 64112. It is now, and was at all times material to the 

issues raised in this proceeding, a registered futures commission merchant under 

the Commodity Exchange Act. 

2. Respondents A. Vincent Blackford and Dwight H. Williams, are individuals 

who, at all times material to the issues raised in this proceeding, were 

President and Secretary-Treasurer, respectively, of the Respondent corporation, 

and as such were responsible for its management, direction and control. 

3. Respondent Goffe & Carkener, Inc., at all times material to the issues 

raised in this proceeding, was a member of the Minneapolis Grain Exchange, 

Chicago Board of Trade, Chicago Mercantile Exchange and the Kansas City Board of 

Trade. Respondent corporation is a clearing member of the Chicago Mercantile 

Exchange which is a designated "contract market" under the Act. This Exchange 

has established minimum financial standards 

and related reporting requirements for its members which have been approved by 

the Secretary of Agriculture. Pursuant to § 1.17 of the Regulations (17 CFR 

1.17) the reporting requirements of the Chicago Mercantile Exchange have been 

adopted as the reporting requirements of the Secretary and are binding on 

Respondent corporation. n1 At the hearing official notice was taken of the 

minimum financial standards and related reporting requirements of the Chicago 

Mercantile Exchange. 

n1 The provisions of the Act dealing with "contract markets" designation 

and authority applicable in this proceeding in pertinent parts provide: 

"§ 7. Designation of board of trade as "contract market"; conditions 

and requirements. The Secretary of Agriculture is hereby authorized and 

directed to designate any board of trade as a "contract market" when, and 

only when, such board of trade complies with and carries out the following 

conditions and requirements: 

* * * 

(b) When the governing board thereof provides for the making and filing 

by the board or any member thereof, as the Secretary of Agriculture may 

direct, of reports in accordance with the rules and regulations, and in 

such manner and form and at such times as may be prescribed by the 

Secretary of Agriculture, showing the details and terms of all transactions 

entered into by the board, or the members thereof, either in cash 

transactions or transactions for future delivery consummated on or subject 

to the rules of a board of trade, or transactions for future delivery, * * 

*. (7 U.S.C. 7) 

* * * 

§ 7a. Duties of contract markets 

Each contract market shall -- 

* * * 

(9) enforce all bylaws, rules, regulations, and resolutions made or 

issued by it or by the governing board thereof or by any committee, which 

provide minimum financial standards and related reporting requirements for 

futures commission merchants who are members of such contract market, and 

which have been approved by the Secretary of Agriculture." (7 U.S.C. 7a). 
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* * * 

The applicable Regulations of the Commodity Exchange Authority which is 

the delegatee of the Secretary of Agriculture in pertinent part provide: 

"§ 1.17. Minimum financial requirements. 

(a) Except as provided in paragraph (b) of this section, * * * each 

person registered as futures commission merchant shall at all times 

continue to meet such financial requirements. 

(b) The requirements of paragraph (a) of this section shall not be 

applicable if the applicant for registration or registrant is a member of a 

contract market and conforms to minimum financial standards and related 

reporting requirements set by such contract market in its bylaws, rules, 

regulations or resolutions and approved by the Secretary of Agriculture as 

adequate to effectuate the purposes of paragraph (2) of section 4f of the 

Act. * * *" (17 CFR 1.17). 

4. At a meeting of the Clearing House Sub-Committee of the Chicago Mercantile 

Exchange on June 8, 1971, to consider the position of Respondent corporation 

which was apparently having financial difficulties, Respondent corporation was 

requested to meet the following capital requirements for its organizational 

structure as well as restrictions in its operations: 

1. $ 75,000 additional cash capital to be paid in three installments -- $ 

25,000 by June 15; $ 25,000 by June 22; $ 25,000 by June 29, 1971. 

2. Subordinated Capital must not exceed 60% by July 9, 1971. This must be 

down to $ 442,000 in subordinated agreements. 

3. 800 car limitation -- no more than 400 in any one commodity. 

At this meeting Respondent Blackford was told of these requirements and given 

the alternative consideration of starting a new corporation having a liquid 

capital structure of $200,000 plus two memberships. These requirements were 

restated in a letted to Respondent corporation which was sent the following day. 

Additional reports were requested of Respondent corporation which were 

specifically stated in the following letter which was sent to it on June 9, 

1971: 

"Please forward the following information to the Chicago Mercantile Exchange 

Department of Audits and Investigations: 

1. Complete the enclosed financial statement for the period ending June 30, 

1971, by July 15, 1971. When you submit this statement on July 15, please 

enclose a new breakdown of the capital position of your firm which should be in 

line with the guidelines set forth by the Clearing House Finance Sub-Committee. 

2. Submit a detailed breakdown of the changes in your capital structure from 

June 30, 1971. This breakdown should show the sources of all new funds and the 

current position as to shares outstanding and their respective owners. 

3. Submit a list of free debits as of the close of business, June 18, 1971. 

4. Submit a run showing customer accounts under maintenance margin that shall 

also include account number, positions and equity as of the close of business, 

June 18, 1971. 

The free debit and maintenance margin runs will be forwarded to our office 

every other Friday commencing with June 18, 1971. Please contact our office if 

you have any questions regarding these requirements." 

In a subsequent meeting on June 16, 1971, the Clearing House Sub-Committee 

reaffirmed the requirements set forth above with only one slight modification. 

If the alternative of a new corporation was not followed, the additional cash 

capital requirement of the existing firm would be $ 50,000 by June 29, 1971, and 

$ 25,000 by July 6, 1971. 
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5. Sometime during the middle of the month of June 1971, Respondent Blackford 

went to the office of Mr. Samuel F. Gordon, Director of the Western Region of 

the Commodity Exchange Authority in Kansas City, Missouri, and advised him that 

the Chicago Mercantile Exchange wanted his firm to separate the cash grain 

business from its commodity futures business. He requested information on what 

should be done in this event to satisfy the CEA requirements. He was advised by 

Mr. Gordon that a new registration would have to be filed and be approved for 

the business entity that would do the commodity futures business. 

Later in the same month, Respondent Blackford had a second conversation with 

Mr. Gordon during which Mr. Gordon told him that he had received information 

from a CEA auditor, who had talked with Respondent Williams, that Goffe & 

Carkener was considering the possibility of making a bank loan using customers' 

securities put up by the customers as margins for trading in regulated commodity 

futures as collateral. He was advised by Mr. Gordon that, if the firm made such 

a loan, it should first contact him and receive approval to be sure that the 

requirements of the Act would be met. On June 24 the CEA auditor, Mr. Gerald J. 

Slinkard, relayed this same advice to Respondent Williams. 

6. On June 23, 1971, Respondent Blackford appeared before the Clearing House 

Sub-Committee of the Chicago Mercantile Exchange and presented a balance sheet 

showing the new corporate structure of Respondent corporation. It did not show 

what the Committee had requested, however, it proposed a separate entity for the 

cash grain business as a wholly owned subsidiary. The subordination showed $ 

100,000 too much to meet the requirements set by the Committee for having no 

more than 60% of the capital funds subordinated. Respondent Blackford was asked 

to correct the necessary details in the corporate structure by June 30th. 

On June 28, the Respondent corporation's cash grain business was separated 

from the commodity futures business and the Goffe Grain Corporation was 

organized to take care of the cash grain transactions. 

7. On July 6, 1971, Respondent Blackford went to Mr. Gordon's office and 

advised him that he was considering making a bank loan for Respondent 

corporation. He said that it was his intention to borrow money against the 

customers' securities put up as collateral and use these funds as a loan to the 

customers instead of using the firm's own funds for the segregated accounts of 

customers. When Mr. Gordon asked if the customers had given specific written 

authorization to use their securities in this manner Mr. Blackford replied that 

he did not consider this necessary since the firm had general agreement forms 

signed by the customers. He left a copy of this general agreement form with Mr. 

Gordon for his review. Later on July 6, 1971, Mr. Gordon went to Respondent 

Blackford's office and advised him that he had been instructed by Mr. Edward F. 

O'Brien, Director of the Registration and Audit Division of the CEA, Washington, 

D.C., to inform Respondent Blackford that the aforementioned general agreement 

form did not provide specific authorization by customers for the use of their 

collateral for the type of loan proposed, as required by the Act, and that 

customers did not have a right to sign away the protection afforded them by the 

Act. 

The specific wording in the general agreement referred to by Respondent 

Blackford as customers' authorization to use their securities in the manner 

proposed is set forth in the "Customer's Margin Agreement" as follows: 

"(d) Any and all property at any time held or carried by you in any account 

for me, either individually or jointly with others, may from time to time and 

without notice to me, be carried in your general loans and may be pledged, 

repledged, hypothecated or rehypothecated, or loaned by you either to yourselves 

as brokers or to others, separately or together with other property for more 

than the amount due you thereon and without having in your possession or subject 

to your control for delivery, property of the same kind and amount, and you 

shall at no time be required to deliver to me the identical property delivered 

to or purchased by you for my account but only property of the same kind and 

amount." 
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This "Customer's Margin Agreement" is an attachment to a "General Customer's 

Agreement" for execution by those customers desiring margin accounts. 

Sometime later on July 6, 1971, Respondent Blackford returned to Mr. Gordons' 

office where a third conversation took place. Mr. 

Blackford told Mr. Gordon that he had contacted two brokerage firms which had 

advised him that it was their practice to accept only Treasury Bills from 

customers as margins for trading in commodity futures. He further stated that 

the firms he talked with told him that if the customers wanted to borrow money 

on their securities these firms would loan the customer their money on 

securities and would set up a special account. Mr. Gordon advised Respondent 

Blackford that if his firm wanted to loan the firm's money to customers on 

securities and set up special loan accounts it would be proper. 

Again, later on July 6, 1971, Mr. Gordon went to Respondent Blackford's 

office where a fourth conversation took place. On this occasion Mr. Gordon told 

Mr. Blackford that Mr. O'Brien had called him from Washington and instructed him 

to tell Mr. Blackford that, if his firm made a bank loan using as collateral the 

customers' securities put up as margin for their accounts, the general agreement 

signed by the customers would not protect the firm; it would be in violation of 

Section 4(d)2 of the Act. n2 Mr. 

Gordon advised Respondent Blackford that this prohibition applied even though 

his firm credited customers' accounts with the proceeds of the loan and 

deposited the money in the firm's segregated bank account. 

n2 In pertinent part this section provides: 

"§ 6d. Futures commission merchants, dealing by unregistered merchants 

prohibited; moneys and securities of customers, care and use. 

It shall be unlawful for any person to engage as futures commission 

merchant in soliciting orders or accepting orders for the purchase or sale 

of any commodity for future delivery, or involving any contracts of sale or 

any contracts of sale of any commodity for future delivery, on or subject 

to the rules of any contract market unless -- 

(1) * * * 

(2) such person shall, whether a member or nonmember of a contract 

market, treat and deal with all money, securities, and property received by 

such person to margin, guarantee, or secure the trades or contracts of any 

customer of such person, or accruing to such customer as the result of such 

trades or contracts, as belonging to such customer. Such money, 

securities, and property shall be separately accounted for and shall not be 

commingled with the funds of such commission merchant or be used to margin 

or guarantee the trades or contracts, or to secure or extend the credit, of 

any customer or person other than the one for worn the same are held: 

Provided, however, That such money, securities, and property of the 

customers of such futures commission merchant may, for convenience, be 

commingled and deposited in the same account or accounts with any bank or 

trust company or with the clearing house organization of such contract 

market, and that such share thereof as in the normal course of business 

shall be necessary to margin, guarantee, secure, transfer, adjust, or 

settle the contracts or trades of such customers, or resulting market 

positions, with the clearing house organization of such contract market or 

with any member of such contract market, may be withdrawn, and applied to 

such purposes, including the payment of commissions, brokerage, interest, 

taxes, storage, and other charges, lawfully accruing in connection with 

such contracts and trades: Provided further. That such money may be 
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invested in obligations fully guaranteed as to principal and interest by 

the United States, such investments to be made in accordance with such 

rules and regulations and subject to such conditions as the Secretary of 

Agriculture may prescribe. 

It shall be unlawful for any person, including but not limited to any 

clearing agency of a contract market and any depository, that has received 

any money, securities, or property for deposit in a separate account as 

provided in paragraph (2) of this section, to hold, dispose of, or use any 

such money, securities, or property as belonging to the depositing futures 

commission merchant or any person other than the customers of such futures 

commission merchant." (7 U.S.C. 6d.) 

8. On July 12, 1971, the Respondent corporation obtained a loan in the amount 

of $ 100,000 from the Mid-Continent National Bank of Kansas City. As security 

for such loan, the Respondent corporation hypothecated to the bank all the 

securities belonging to 17 regulated commodity customers which had been 

deposited as margins for their accounts. The proceeds of such loan were 

deposited by Respondent corporation in its General Funds Bank Account in the 

Commerce Bank of Kansas City on July 13, 1971. 

In connection with this loan Respondent Blackford sent a letter to the MidContinent National Bank wherein he stated that the purpose of the loan 

"is for making loans to customers under Section 130 Part 1, of the 

Regulations of the Commodity Exchange Act and that the securities deposited as 

collateral therefore, are the property of commodity customers and must be 

treated as such and may not be used as collateral for general purpose loans to 

this firm, nor may the proceeds thereof be used for the payment of accounts of 

general creditors of the firm." 

Nevertheless, Respondent corporation withdrew the funds from the lending bank 

and deposited them in another bank, thereby effectively preventing the MidContinent Bank from exercising any control over the use of the funds. 

The President of the Mid-Continent Bank testified that in making the loan he 

was concerned only with the value of the collateral and the signatures thereon, 

and that as far as the bank was concerned it was just a commercial loan. 

9. On July 13, 1972, the market value of the securities of the 17 regulated 

commodity customers of Respondent corporation which were put up as collateral 

for the loan from the Mid-Continent Bank were as follows: 

Regulated Commodity Market Value of Customer's

Customer Securities as of 7/13/71 

John D. Friesen $ 19,537.50

Norris & Son 9,755.75

Ted W. Fullmer 11,987.50

M. R. Klint 16,028.12 

 

Regulated Commodity Market Value of Customer's

Customer Securities as of 7/13/71 

Milton B. Herbrick 4,448.25

W. C. Willis 3,890.25

Ezra Stetson 21,337.50

Albert J. Barker 9,237.50

D. W. and A. Holmes 2,665.62

Calvin C. Carson 2,687.50

Jack D. Saggart 33,758.75

Alfred H. Miller 537.50

Robert E. Reed 3,262.50

Mrs. Mae Lewis 2,525.00

John F. Hall 1,812.50

Louis E. Hall 812.50
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Regulated Commodity Market Value of Customer's

Customer Securities as of 7/13/71 

Dan Chatterson 3,275.00

$ 147,559.24

On this date Respondent corporation had written agreements with 10 of these 

customers on the form of the general agreement with related "Customer's Margin 

Agreement" referred to and discussed in Finding of Fact 7. Respondent 

corporation had other written agreements with 6 of these 17 customers on the 

form of a "Commodity Signature Card" (Exhibit 8). Examination of this 

"Commodity Signature Card" form, which is comparatively short, discloses that it 

does not contain any language whatever authorizing Respondent corporation to 

sell or hypothecate securities put up as collateral or margin of commodity 

accounts. So far as the evidence shows Respondent corporation had no written 

agreement at all with 1 of these 17 customers. 

10. The minutes of a meeting of the Clearing House Sub-Committee of the 

Chicago Mercantile Exchange on July 14, 1971, contains the following entry: 

"Mr. Tim Berry reported that the release Mr. Blackford was going to obtain 

from his customers, was not adequate according to Mr. Jerrold Salzman, the 

Exchange's lawyer. Mr. Salzman gave Mr. Berry a suggested release to be used by 

Goffe-Carkener. This release is being sent to Mr. Black-ford, who stated that 

there should be no problem in obtaining these releases. 

The Chairman instructed Mr. Berry to see if the subordination agreements we 

now have on file would have to be rewritten, in lieu of the fact that there is a 

new corporation being formed. If the agreements do have to be rewritten, Mr. 

Lind wants it to be on a form approved by the Exchange, namely, Mr. Salzman." 

11. On July 14, 1971, the Respondent corporation credited the financial 

ledger accounts of the 17 regulated commodity customers whose securities were 

hypothecated for the aforementioned loan as follows: 

Regulated Commodity Shown as Credited 

Customer Customer's Account 7/14/71 

John D. Friesen $ 13,600.00

Norris & Son 7,300.00

Ted W. Fullmer 6,800.00

M. R. Klint 10,900.00

Milton B. Herbrick 3,300.00

W. C. Willis 2,350.00

Ezra Stetson 14,200.00

Albert J. Barker 6,400.00

D. W. and A. Holmes 1,800.00

Calvin C. Carson 1,760.00

Jack D. Saggart 26,500.00

Alfred H. Miller 300.00

Robert E. Reed 2,400.00

Mrs. Mae Lewis 2,400.00

John F. Hall 1,350.00

Louis E. Hall 550.00

Dan Chatterson 2,200.00

Total Credits $ 104,110.00

The evidence discloses that there was no uniformity in entering such credits. 

Two of the customers actually had credit balances in their accounts already, six 

others had no open trades, others had actual deficits but in amounts different 

from the credits entered. The explanation for the action, which was given by 

Respondent Williams to auditor Slinkard at the time of his subsequent audit, was 

that the firm had simply credited each account with approximately 67% on the 

average of the value of the securities in each account. Exhibit 12 shows that 

the total of all the deficits of all kinds in the 17 regulated commodity 

customers accounts at the time of the credits was only $ 79,573.89. Thus the 

credits entered exceeded the deficits by $ 24,536.11. 
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The same action was taken in connection with non-regulated commodity 

accounts. Such accounts were credited in the aggregate amount of $ 7,150.00. 

The total aggregate deficits in such accounts before the credits were entered 

was nil. 

12. On July 14, 1971, the Respondent corporation arbitrarily established for 

each such customer an account entitled "Special Loan Account-Option Customers". 

Entries were made in these accounts 

 

as loans to customers in the amounts of the credits entered in such accounts as 

shown in Finding of Fact 11. 

On July 15, 1971, the Respondent corporation sent a letter to each of the 17 

regulated commodity customers. This letter was signed by Respondent Williams 

and reads as follows: 

"This letter is in regard to Securities deposited with us as margin on your 

commodity transactions. 

In the past we have maintained 'hand' bookkeeping records on these 

securities; however, since we are now on data processing, to simplify the 

handling of these securities we have credited your commodities account as shown 

by the attached statement with a portion of the value of these securities which 

amounts to $ and debited an account in your name called a 'Special Loan 

Account-Option Customers'. 

If additional securities are deposited or withdrawn, this loan will be 

adjusted. 

We will continue to assess interest on a daily basis on the amount needed to 

margin your account, and you will receive the usual monthly statement on your 

Commodity Account and also a statement of the Special Loan Account. 

We believe this will help us keep a better record on these securities and 

will also give you more information for your files." 

13. On July 21, 1971, Mr. Gerald A. Slinkard, an auditor of the Commodity 

Exchange Authority Regional Office in Kansas City, Missouri, commenced a routine 

audit of the segregated funds accounts of Respondent corporation. During the 

conduct of this audit he was advised by Respondent Williams that the proceeds of 

the loan from the Mid-Continent Bank on July 12 had been credited to customers' 

commodity accounts, thus explaining the unusual drop in the deficit accounts in 

the segregated funds records. Mr. Slinkard asked for and received a copy of the 

agreements on record with Respondent corporation of the 17 regulated commodity 

customers whose funds had been used as collateral for the loan. These 

agreements were described and discussed in Findings of Fact 7 and 9 supra.

On or about July 21, 1971, Respondent corporation requested its customers to 

replace the "Signature Card Agreement" with the above-described "General 

Agreement". This action was completed by August 6, 1971. 

14. In accordance with § 1.10(d) of the Regulations, on July 23, 1971, 

Respondent Williams sent to the Commodity Exchange Authority a copy of the 

Statement of Financial Condition of Respondent corporation as of July 1, 1971, 

with supporting schedules. This information had been sent to the Chicago 

Mercantile Exchange on the previous day by Respondent Blackford. The forwarding 

letter to the Exchange states: 

" July 22, 1971 

Chicago Mercantile Exchange 

110 North Franklin Street 
Page 9 

Chicago, Illinois 60606 

Attention: Mr. William M. Phelan, Vice-President 

Department of Audits and Investigations 

Dear Mr. Phelan: 

On June 28, 1971, a new corporation named 'Goffe Grain Corporation' was 

organized and registered with the Secretary of the State of Missouri. 

The paid-in capital to the corporation was $ 100,000.00, in cash, for which 

common stock was issued to Goffe & Cark-ener, Incorporated. Concurrently, all 

of the cash grain operations including the assets and liabilities relating 

thereto were transferred from Goffe & Carkener, Incorporated. The Statement of 

Financial Requirements attached hereto reflect the financial statement of Goffe 

& Carkener, Incorporated after giving affect to the transfer to Goffe Grain 

Corporation, and also includes as an investment in non-current assets the $ 

100,000.00 stock ownership of Goffe Grain Corporation. 

Sincerely yours, 

GOFFE & CARKENER, INC. 

A. Vincent Blackford 

President " 

The covering letter to the Commodity Exchange Authority states: 

" July 23, 1971 

Mr. Sam Gordon 

Commodity Exchange Authority 

Suite 356 -- 4800 Main Street 

Kansas City, Missouri 64112 

 

Dear Mr. Gordon: 

We are pleased to enclose Statement of Financial Condition as of July 1, 

1971, with supporting schedules on the form furnished by the Chicago Mercantile 

Exchange. Trust this statement will fill your requirements. 

Yours truly, 

GOFFE & CARKENER, INC. 

Dwight H. Williams " 

15. On July 28, 1971, Mr. Gordon's office communicated with all 17 of the 

regulated commodity customers of Respondent corporation above referred to and 

asked them about their understanding of the agreement they had with Respondent 

corporation, and whether they had any agreement authorizing Respondent 

corporation to use the securities put up by them as collateral for loans of any 

kind. The customer responses comprise Exhibits numbered 4-A through 4-Q of the 

record. These responses varied. In no instance did a customer state that he 

had any specific written agreement other than a "General Agreement" or 

"Signature Card Agreement", referred to in Findings of Fact 7 and 9 supra. Some 

customers said they had oral agreements, others that they thought the agreement, 

whether general or signature card, either did or did not give loan 

authorization. 
Page 10 

16. The minutes of the meeting of the Clearing House SubCommittee of the 

Chicago Mercantile Exchange on August 11, 1971, contains the following selfexplanatory entry: 

"The firm of Goffe-Carkener may be in possible violation of the CEA Act. 

This matter will be discussed further at the next meeting." 

On the following day, August 12, 1971, the Clearing House Sub-Committee held 

a meeting solely for the purpose of considering the Respondent corporation's 

financial statement of July 1. The pertinent minutes of that meeting are selfexplanatory: 

"GOFFE CARKENER:

A financial statement of July 1, 1971 was distributed and discussed. 

The basic test administered showed Goffe Carkener to be $ 2,000 over the 

required figure. On the liquidity test the firm is found to be $ 133,000 

liquid, $ 8,000 over the required figure. 

A previous demand was made to have not over 60% of their capital in 

subordinated borrowings. This has not been met. 

MOTION:

After discussion it was moved by Mr. Godow, seconded by Mr. Browne and 

unanimously CARRIED, That Goffe-Cark-ener be asked meet the following 

requirements: 

1. Acquire an additional $ 50,000 in new capital (not subordinated loan) by 

August 30, 1971. 

2. Reduce funds in subordinated borrowings to 60% by August 30, 1971 

3. July 31st statement by August 30, 1971 

* * * " 

17. On August 20, 1971, Mr. Gordon wrote to the Respondent corporation as 

follows: 

"Our examination of the loan disclosed that your firm failed to obtain 

specific written agreements from the regulated commodity customers involved 

prior to the execution of the loan. Absence of such written agreements required 

under Section 1.30 of the Commodity Exchange Act Regulations in our opinion 

constitutes a violation of Section 4d(2) of the Commodity Exchange Act and 

Sections 1.20(a) and 1.30 of the Regulations by your firm. As I previously 

informed you on July 6, 1971, the General Customer Agreements and related 

Customer Margin Agreements your firm had on hand were not proper agreements as 

required under Section 1.30 of the Commodity Exchange Act Regulations in that 

customers do not have the right to sign away the protection afforded to them 

under the Commodity Exchange Act. 

Consequently, in our opinion, each day that securities deposited by regulated 

commodity customers in lieu of cash margins are being used to secure your loan 

from the Mid-Continent National Bank, your firm is in continuous violation of 

our Act and Regulations." 

In pertinent part Sections 1.20(a) and 1.30 of the Regulations (17 CFR 

1.20(a), 1.30), are set forth below. n3 

n3 "§ 1.20 Customers' money, securities, and property to be segregated 

and separately accounted for. 

(a) All money, securities, and property received by a futures commission 

merchant to margin, guarantee, or secure the trades or contracts of 

commodity customers and all money accruing to such customers as the result 

of such trades or contracts shall be separately accounted for and be 
Page 11 

segregated as belonging to such customers. Such money, securities, and 

property, when deposited with any bank, trust company, clearing 

organization of a contract market, or another futures commission merchant, 

shall be deposited under an account name which will clearly show that they 

are customers' money, securities, and property, segregated as required by 

the Commodity Exchange Act. Each registrant shall obtain and retain in his 

files for the period provided in § 1.31, an acknowledgement from such bank, 

trust company, clearing organization of a contract market, or futures 

commission merchant, that it was informed that the money, securities, and 

property deposited therein are those of commodity customers and are being 

held in accord with the provisions of the Commodity Exchange Act. Under no 

circumstances shall any portion of commodity customers' money, securities, 

or property be obligated to the clearing organization of a contract market, 

or to any member of a contract market, a futures commission merchant, or 

any depository except to margin, guarantee, secure, transfer, adjust, or 

settle trades and contracts made on behalf of such commodity customers. 

Nor shall any such money, securities, or property be held, disposed of, or 

used as belonging to the depositing futures commission merchant or any 

person other than the customers of such futures commission merchant." 

* * * 

"§ 1.30 Loans by futures commission merchants; treatment of proceeds. 

Nothing contained in the rules and regulations in this chapter, shall be 

construed to prevent a futures commission merchant from lending his own 

funds to commodity customers on securities and property pledged by such 

customers, or from re-pledging or selling such securities and property 

pursuant to specific written agreement with such customers: Provided, 

however, That the proceeds of such loans used to margin, guarantee, or 

secure the trades or contracts of such customers in any commodity for 

future delivery shall be treated and dealt with by such futures commission 

merchant as belonging to such customers, in accordance with and subject to 

the provisions of section 4d(2) of the Commodity Exchange Act." 

* * * 

(For section 4d(2) of the Act see footnote 2). 

 

18. On August 23, 1971, Respondent Blackford went to Mr. Gordon's office and 

requested a copy of an approved CEA form for specific customer authorization in 

connection with loans on securities left as margins with the firm. On the 

following day, Mr. Gordon gave Respondent Blackford such a copy as prepared by 

the Commodity Exchange Authority. It reads: 

"I have on deposit with Goffe & Carkener, Inc. the following securities in 

lieu of cash to margin any regulated commodity futures trades; 

I hereby authorize you to use these securities as collateral for a cash loan 

by your firm to my regulated commodity futures account, in the amount of $ . 

Your are further authorized to repledge or sell such securities. 

 . 

(Customer's Signature)" 

19. On August 24, 1971, Respondent Blackford sent to each of the 17 regulated 

commodity customers the following letter: 

"The Commodity Exchange Authority has requested that we obtain your signature 

on the enclosed authorization in regard 

 

to the loan we have made to you which is collateralized with various securities. 

The amount of the loan is credited to your regulated commodity account. 
Page 12 

We are enclosing a self-addressed envelope for your convenience in returning 

the signed authorization to us. 

Yours truly, 

GOFFE & CARKENER, INC. " 

The enclosed authorization referred to was on the form given him by Mr. 

Gordon on the previous day. On learning of these letters Mr. Gordon wrote to 

Respondent Blackford on September 3, 1971, as follows: 

"Dear Mr. Blackford: 

It has come to our attention that on or about August 24, 1971, you sent the 

following letter to regulated commodity customers who have placed securities in 

lieu of cash with your firm to margin and guarantee their regulated commodity 

futures trades: 

'The Commodity Exchange Authority has requested that we obtain your signature 

on the enclosed authorization in regard to the loan we have made to you which is 

collateralized with various securities. 

The amount of the loan is credited to your regulated commodity account. 

We are enclosing a self-addressed envelope for your convenience in returning 

the signed authorization to us.' 

As indicated in the attached letter, we have notified such customers that we 

have made no such request of your firm. 

I wish to remind you, as I did in my letter of August 20, 1971, that every 

day the securities in question are held out of segregation and used to secure 

your loan with the Mid-Continent National Bank, your firm, in my opinion, is in 

continuous violation of our act and regulations. Sincerely, 

SAMUEL F. GORDON" (Italics added.) 

What the CEA objected to was the representation in the firm's letter that the 

CEA was requesting the customers to sign the authorization 

 

when in fact it was the customers' option to do so. In addition, the letter 

reiterates the previous advice to Respondent corporation that the withdrawal of 

the collateral out of segregation was illegal. On September 3, 1971, Mr. 

Gordon, in connection with the Respondent corporation's letter of August 24, 

1971, advised each of the customers by letter in pertinent part as follows: 

"This is to inform you that the Commodity Exchange Authority made no such 

request. The Commodity Exchange Act does not require such an action on the part 

of a regulated commodity customer. You may use your securities as margin, in 

lieu of cash, for your regulated commodity account without signing an 

authorization giving Goffe & Carkener, Inc., permission to repledge, sell, or 

use them as collateral. 

Our audit of Goffe & Carkener's records showed no evidence that you ever gave 

specific authorization to them to repledge or sell your securities or to have 

them consider your securities as collateral for a loan. Therefore, such 

securities must be properly segregated under the Commodity Exchange Act and used 

for no other purpose than to guarantee, margin, or secure your regulated 

commodity futures trades. 

If, as a result of Goffe & Carkener's recent letter to you, you have signed 

an authorization which gives them the right to repledge or sell your securities, 

you have the right to rescind such agreement." 

20. In connection with the Statement of Financial Condition as of July 1, 

1971 (Exhibit 3), which was submitted to the Chicago Mercantile Exchange on July 

22, 1971, and to the Commodity Exchange Authority on July 23, 1971, all of the 

testimony agrees that some of the facts recited in the statement did not conform 
Page 13 

to the actual conditions as of July 1, 1971. However, all of the testimony 

agrees that the facts, as recited in the statement, were verified to be true as 

of July 14, 1971. In other words, the statement would have been correct if it 

had read "as of July 13 or 14, 1971," instead of "as of July 1, 1971". 

21. The evidence discloses that the 17 regulated commodity customers of 

Respondent corporation referred to herein deposited securities in lieu of cash 

with the firm to be used as margins in making trades. Prior to July 12, 1971, 

the securities were simply segregated by Respondent corporation and kept in a 

safe place. Such cash as was required by Respondent corporation to handle a 

 

customer's trades or clear a customer's account was advanced by Respondent 

corporation from its own funds. Interest on such amounts advanced was charged 

to the customer's account. Respondent corporation simply handled the securities 

deposited as collateral to secure it for money generally advanced on behalf of 

its customers operations. 

CONCLUSIONS

The first charge in the complaint is that Respondent corporation improperly 

used securities deposited with it by its regulated commodity customers in 

violation of section 4d of the Act and sections 1.20 and 1.30 of the 

Regulations. In this connection, the Findings of Fact clearly disclose that the 

securities in evidence were put up solely as margins by the customers in lieu of 

cash to facilitate trading in their accounts and for no other purpose. The 

Findings of Fact further disclose that Respondent corporation took these 

securities and pledged them as collateral for a loan to it, commingled the 

proceeds of the loan in its own general purpose bank account, and used the 

commingled funds for purposes other than the exclusive accounts of the 

customers. 

The purpose of section 4d(2) of the Act and section 1.20(a) of the 

Regulations is to require that all money, securities, etc., deposited by 

regulated commodity customers with a future commission merchant to margin, 

guarantee or secure their trades or contracts, as well as all accruals as a 

result of such trades or contracts, shall be held in a segregated account or 

accounts by the commission merchant and not commingled with its own funds. When 

the securities were removed from segregation and used by Respondent corporation 

as collateral for a general purpose loan, it clearly violated the mandatory 

requirement of the Act and the Regulations requiring strict segregation of all 

of customers' funds. 

The illegal action of the Respondent corporation in pledging the securities 

of its customers for its own general purpose loan exposed such securities to the 

possibility of forfeiture to the bank in the event the loan was not paid. 

Moreover, it impaired the right of a customer to withdraw his securities at 

will, subject only to the position of his account vis-a-vis necessary margins 

and other lawful charges against it. While it is true that the Respondent 

corporation did from time to time advance its own cash funds to the accounts of 

some of the regulated commodity customers, thereby 

 

creating obligations which might have been recouped by Respondent corporation 

against such securities, it is clear that the securities, in any event, were 

intended to secure the Respondent corporation only to the extent of satisfaction 

of such obligations. This was the stated purpose of their deposit. 

Respondents argue that clause (d) of the "Customer's Margin Agreement" gave 

Respondent corporation specific written authority to use the securities 

deposited by its customers as collateral for general purpose loans of the firm, 

thus satisfying the mandatory requirement of section 1.30 of the Regulations for 

loans to customers. We hold that the weight of the evidence does not support 

this construction of clause (d), nor does section 1.30 provide for authorization 
Page 14 

by customers of use of funds outside segregation. In the first instance, there 

is no general prohibition in the Act against brokers lending money to customers 

on securities. Mr. Gordon advised Respondent Blackford of this fact. Such 

general loan arrangement do not come under the purview of the Act and 

conceivably Respondent corporation could make loans to anyone. The function of 

lending money generally is an activity which is entirely divorced from the 

treatment of securities deposited by customers to be used as margins for their 

trading activities, which is an activity covered by the Act. Any activity in 

connection with such securities must, therefore, be carefully scrutinized. 

Analysis of clause (d) in the "Customer's Margin Agreement" discloses that it 

was intended only to supplement and facilitate operations in connection with 

margin trading by customers as a convenience in lieu of cash. To construe the 

intent of clause (d) in the manner as argued by Respondents would be to maintain 

that all customers who wanted to trade on margin were first required to waive 

section 4d(2) of the Act before they could trade at all, because such margin 

customers were required to sign the margin agreement of which clause (d) is a 

part. This, of course, is such an obviously untenable position as to require no 

further comment, because it would nullify the mandate of the Act requiring 

segregation of customer's funds. Moreover, the facts disclose that 7 of the 17 

customers affected had not even signed the "Customer's Margin Agreement" on July 

12, the time of the bank loan on their securities, so with respect to them, in 

any event, the 

Some argument was advanced by Respondents that the CEA had previously 

approved the "Customer's Margin Agreement" argument of Respondents is 

unavailing. 

 

form for use, thereby putting Respondents in the position of relying on clause 

(d) as supporting its action here in question. This argument is without merit. 

At the time the CEA previously reviewed the form, at which time it required an 

additional section to cover other unrelated aspects of Respondent corporation's 

activities, there was no indication whatever that Respondent corporation 

intended to borrow money for its own use on customer's securities as they 

subsequently did. Indeed, when the matter of the loan was suggested, Respondent 

Blackford was told that such a loan was prohibited -- and that clause (d) 

afforded no protection. Nevertheless, Respondent corporation, in spite of such 

foreknowledge and specific repeated advice from CEA officials, did make the 

loan. The fact that Respondent corporation, subsequent to the loan, secured the 

signatures of the remaining 17 regulated commodity customers on its "Customer's 

Margin Agreement" form in no way legalizes the prohibited use of the securities 

or extends the intended customer authorization in clause (d). 

Some additional argument was advanced by Respondents that the establishment 

of credits to the customer's accounts to replace money advanced to the accounts 

was justification for the action taken in using the customer's securities for 

the loan. We hold this argument does not establish mitigation, if such is its 

purpose, because the credits could have been established without violating the 

segregation requirements of the Act. The loans on the securities could have 

been made as a part of the management of the segregated accounts. Undoubtedly, 

however, such an action would not result in obtaining the same amount of cash, 

which was urgently needed to increase its financial liquidity at the demand of 

the Exchange -- an amount which was obviously larger than the credits 

established. 

There was much discussion on the record and substantial argument advanced by 

the parties about the specific written agreement provision in section 1.30 of 

the Regulations. It is unnecessary to resolution of this action to do anything 

more than to note that the section cross-references section 4d(2) of the Act and 

that no specific written agreement in relation to loans on regulated commodity 

customers securities may authorize a breach of the Act requiring segregation of 

all of customer's funds advanced as margins, or to secure margins in their 

trading accounts. This misuse of securities constitutes the essential violation 
Page 15 

of the Act by Respondent corporation and it applies equally to the securities of 

all 17 of the regulated commodity customers. 

For the reasons above stated we conclude that Respondent corporation violated 

section 4d(2) of the Act and sections 1.20 and 1.30 of the Regulations as 

charged. Cf. In re David L. Hofer, 29 Agric. Dec. 1334 (29 A.D. 1334); In re 

Arthur Gerber and Gerber Investment Co., Inc., 27 Agric. Dec. 1362 (27 A.D. 

1362), and cited cases. 

The second charge in the complaint is that Respondent corporation violated 

section 6(b) of the Act (7 U.S.C. 9) in that it wilfully submitted to the 

Commodity Exchange Authority a financial statement which contained several 

material false statements. The uncontradicted evidence and Finding of Fact show 

that a financial statement, which was submitted by Respondent corporation on 

July 23, 1971, represented the firm's financial position "as of July 1, 1971", 

when, in fact, certain material financial transactions reported therein had not 

been accomplished by that date. Respondents admit that certain of the material 

facts reported were not accomplished by July 1, 1971, but argue that they did 

not wilfully violate the Act because the statement was not intended to be and 

was not anything more than a "pro forma" statement. 

While it is clear that the facts referred to were not accomplished by July 1, 

1971, the evidence shows that they were all accomplished later in the month. n4 

In other words, had the statement read "as of July 14, 1971," it would have been 

factually correct. The matter for consideration, therefore, is whether the 

statement was materially false within the context of the Act. 

n4 The specific facts referred to are detailed in Exhibit 13. 

In support of their contention that the financial statement submitted was pro 

forma, Respondents argue that the letter of transmittal accompanying the 

statement contains language which indicates that it was. The specific language 

is, "The Statement of Financial Requirements attached hereto reflect the 

financial statement of Goffe & Carkener, Incorporated, after giving affect to 

the transfer to Goffe Grain Corporation, and also includes as an investment in 

non-current assets the $ 100,000 stock ownership of Goffe Grain Corporation". 

They argue that the words, "after giving affect to", is language descriptive of 

pro forma statements. Respondents further argue, in substance, that the matters 

which the Chicago Mercantile Exchange directed Respondent corporation to 

accomplish could not have been accomplished by July 1, 1971, and that, 

therefore, by implication, the Exchange understood that the statement was to be 

a pro forma. We are not persuaded by either argument. 

The evidence discloses that the Exchange had a series of meetings with 

Respondent Blackford prior to July 1, 1971, which culminated in a directive to 

accomplish certain actions by certain dates and to report the actions taken. 

The minutes of these meetings reflect the urgency of the Exchange to have 

Respondent corporation inter alia quickly increase its liquid financial position 

by certain amounts by certain dates -- all prior to July 1, 1971. These minutes 

recite discussions with Respondent Blackford concerning ways and means of 

accomplishing this result during which a balance sheet with a pro forma 

statement was submitted to the Exchange for discussion at its meeting on June 

23, 1971. This meeting culminated in specific directions to Respondent 

Blackford to correct the necessary details in the statement by June 30, 1971. 

There is nothing whatever in the actions taken by the Exchange or in its 

directive to indicate that the report requested was to be pro forma or that the 

actions to be taken by Respondent corporation were tentative. Moreover, Mr. 

William Phelan, Vice President of the Exchange testified that the Exchange did 

not expect a pro forma report, and that the report which was submitted to it was 

not considered by him to be such. 
Page 16 

When the statement was submitted to the CEA it was not understood by the CEA 

to be pro forma. CEA had not asked for the statement but its submission was 

required pursuant to section 1.10(d) of the Regulations. It must be noted that 

the Exchange at the time was concentrating on the financial liquidity position 

of Respondent corporation, whereas the CEA officials, by virtue of discussions 

with Respondents Blackford and Williams during the same period of time, were 

also concerned with the preservation of the segregation of regulated commodity 

customers funds vis-a-vis a proposed bank loan to customers securities. The 

statement in question submitted to the Exchange and the CEA purportedly covered 

all aspects of Respondent corporation's financial position. It is obvious that 

such a financial statement submitted to both authorities in this situation 

particularly must be exact and complete, for the sole purpose of the submission 

of such a statement is to convey exact information. The nature of required 

financial reports, generally, dealing as they do with fluid situations, make 

proper dating of information of primary importance. 

It is noted further that, in situations where pro forma reports are intended, 

prudence would demand and common practice dictates that such reports be clearly 

labelled as pro forma in unambiguous language. We do not find that the language 

in the letter 

 

of transmittal in the circumstances supports Respondent's argument. Indeed, the 

evidence discloses that Respondent corporation followed the practice of clearly 

labelling pro forma statements as such by use of the very words when it 

submitted a report to the Kansas City Board of Trade on April 30, 1971, -- just 

a few months previous. The fact that it was not done in the instant situation 

impells a conclusion that the statement submitted was not a pro forma statement 

and Respondents knew what they were doing and knew the impression they desired 

the report to have on the Exchange, i.e., a demonstration of compliance with its 

directive within the time frame specified. 

Some argument was advanced that it was not possible for Respondent 

corporation to accomplish the actions directed by the Exchange within the time 

limits set. If this were in fact true, there was nothing to prevent Respondent 

corporation's officers from calling this fact to the attention of the Exchange. 

This is a reasonable and usual procedure in the circumstances. This was not 

done. What was done was to submit a statement to the Exchange which purported 

to show compliance with its directive when, in fact, the actions reported had 

not been taken. 

On the basis of the testimony of Mr. Phelan and the clear direction of the 

Exchange as evidenced by the minutes of the June 23rd meeting, together with the 

prevalent condition of Respondent corporation's financial position and the 

statutory responsibility of the Exchange to enforce its Rules and Regulations, 

it is obvious that the Exchange was most serious in demanding prompt compliance 

by Respondent corporation, not a pro forma statement. On the special matter of 

immediate concern to the CEA, i.e., the proposed loan on customers' securities, 

the statement is incorrect with respect to the time of the consummation of the 

loan and the employment of the resulting funds. After the several discussions 

on the matter one cannot reasonably believe that the CEA officials would not be 

seriously concerned with the accuracy of any report of final action taken in 

this regard. They did not want or expect a pro forma statement either. 

The consideration that the facts in the statement were rendered not false on 

a date some two weeks later does not mitigate the falsity of the statement as of 

the time represented. The reason for this is apparent. If it were permissible 

to file an incorrect statement and cure, or possibly cure, it later, the ability 

of the CEA to have current knowledge of a registrant's activities 

 

would be nullified. This review of registrants' activities through registrants' 

reports is the principal method used by the agency in administering the program 
Page 17 

authorized by the Act. It was a method clearly contemplated by the Act and more 

explicitly detailed by the Regulations. 

On the basis of the foregoing we conclude that the preponder-ence of the 

evidence supports a conclusion that the financial statement submitted by 

Respondent corporation as of July 1, 1971, was false in material respects and 

that it was wilfully submitted by Respondents for the purpose of misleading both 

the Exchange and the CEA. Further, we conclude that such action on the part of 

Respondent corporation constitutes a violation of section 6(b) of the Act. (Cf: 

In re Sy B. Gaiber and Co., 31 Agric. Dec. 474 (31 A.D. 474); In re David L. 

Hofer, supra; and In re Sterling Securities, Inc., Paul J. Miller and R. Peter 

Denker, 28 Agric. Dec. 115 (28 A.D. 115)). 

As applicable to this statute the term "wilful" means that there need be 

present no more than an intention to perform the actions constituting the 

violations. (Cf: In re Cargill, Incorporated, Erwin E. Helm, H. Robert Diercks, 

Walter B. Saunders, and Benjamin S. Jaffray, 29 Agric. Dec. 880 (29 A.D. 880), 

affmd. Cargill, Incorporated, et al., v. Hardin, et al., 452 F. 2d 1154; and 

Great Western Food Distributors, Inc. v. Brannan, 201 F. 2d 476, 484 (7th Cir. 

1953), cert. denied, 345 U.S. 997 (1953)). 

The decisions under the Act uniformly impose sanctions against responsible 

corporate officials for violations of the Act or Regulations by the corporation 

under their management, direction, and control. (Cf: In re Louis Romoff, 31 

Agric. Dec. 158 (31 A.D. 158); In re Cargill, Incorporated, et al., supra; and 

In re Sterling Securities, Inc., et al., supra).

The violations of the Act and the Regulations as found and concluded herein 

are serious offenses. We hold, therefore, that the sanctions recommended by the 

Commodity Exchange Authority for application in this instance are not 

unreasonable and that they are consistent with sanctions imposed for similar 

violations by others. Accordingly, the order submitted herewith is deemed 

proper and appropriate in the circumstances. 

All contentions of the parties presented for the record have been considered 

and, whether or not specifically mentioned herein, any arguments, requests, 

motions, etc., inconsistent with this decision are denied. 

ORDER

1. The Respondents, individually and collectively, shall cease and desist 

from: 

a. Wilfuly making any material false or misleading statement in any report or 

application filed under the Commodity Exchange Act. 

b. Wilfuly omitting to state any material fact in connection with any such 

application or report. 

c. Failing to treat and deal with customers' funds as belonging to such 

customers as required by section 4d of the Commodity Exchange Act (7 U.S.C. 6d) 

and the regulations thereunder, including, but not limited to, sections 1.20 and 

1.30 of such regulations. (17 CFR 1.20, 1.30) 

d. Failing to hold customers' funds in segregated accounts as required by 

section 4d of the Commodity Exchange Act (7 U.S.C. 6d) and the regulations 

thereunder. 

e. Wilfuly causing, aiding, counseling, commanding or inducing any person to 

engage in any act or practice from which the Respondents are directed to cease 

and desist by this order. 

2. The registration of Respondent Goffe & Carkener, Inc., is suspended for a 

period of 60 days. 

3. The Respondents, Goffe & Carkener, Inc., A. Vincent Blackford and Dwight 

H. Williams are prohibited from trading on or subject to the rules of any 
Page 18 

contract market for a period of 60 days and all contract markets shall refuse 

all trading privileges to the said Respondents during this period. Such 

prohibition and refusal shall apply to all trading done and positions held 

directly by the said Respondents, or any of them, either for their own accounts 

or as the agents or representatives of any other person or firm, and also to all 

trading done and positions held indirectly through persons or firms owned by the 

Respondents, or any of them, or otherwise. 

4. The cease and desist provisions of this order set forth in subparagraph 1, 

above, shall become effective on the date this decision and order become final. 

The period of suspension of the registration of the Respondent Goffe & Carkener, 

 

Inc., set forth in subparagraph 2, above, and the period of the prohibition of 

trading and denial of trading privileges to the Respondents set forth in 

subparagraph 3, above, shall become effective on the thirtieth day after the 

date this decision and order become final. * 

* The decision and order became final October 15, 1973. -- Ed. 

5. Pursuant to the amended Rules of Practice governing proceedings under the 

Commodity Exchange Act, this decision and order become final without further 

procedure 35 days after service hereof, unless appealed to the Secretary by a 

party to the proceedings within 30 days after service, as provided in § 0.16 and 

§ 0.18 of the amended Rules of Practice published in the Federal Register of 

August 20, 1973, (38 F.R. 22381). * 

* The decision and order became final October 15, 1973. -- Ed. 

6. A copy of this decision and order shall be served on each of the parties 

and on each contract market. 

LIST OF DECISIONS REPORTED

OCTOBER 173 

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