Page 1 

Commodity Futures Trading Commission 

CEA CASES 

NAME: EDWARD R. BYER, JOEL STARRELS, JAMES T. MCKERR AND COMPANY, JAMES T. 

MCKERR, CHARLES J. MCKERR, AND GILBERT D. MATHY 

DOCKET NUMBER: 62 

DATE: AUGUST 20, 1962 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Edward R. Byer, Joel Starrels, James T. McKerr and Company, James T. 

McKerr, Charles J, McKerr, and Gilbert D. Mathy, Respondents 

C.E.A. Docket No. 62 

Complaint and Notice of Hearing under the Commodity Exchange Act 

The Secretary of Agriculture has reason to believe that the respondents, 

Edward R. Byer, Joel Starrels, James T. McKerr and Company, James T. McKerr, 

Charles J. McKerr, and Gilbert D. Mathy, have violated the Commodity Exchange 

Act and the rules and regulations made pursuant to its requirements. In 

accordance with the provisions of section 6(b) of the Commodity Exchange Act (7 

U.S.C. 9), this complaint is issued alleging as follows: 

I 

The Board of Trade of the City of Chicago, hereinafter called the Chicago 

Board of Trade, was at all times material to this complaint a duly designated 

contract market under the Commodity Exchange Act. 

II 

Respondent Edward R. Byer, an individual whose address is 

Box 269, Route 2, Garland Texas, is a trader in commodity futures. At all times 

material to this complaint, the said Edward R. Byer was a non-clearing member of 

the Chicago Board of Trade. The said respondent was not at any such time a 

registered futures commission merchant or registered floor broker under the 

Commodity Exchange Act, and all futures transactions executed by him on or 

subject to the rules of the Chicago Board of Trade were executed for his own 

account. 

III 

Respondent Joel Starrels, an individual whose business address is Room 1480, 

Board of Trade Building, 141 West Jackson Blvd., Chicago 4, Illinois, is a 

trader in commodity futures. At all times material to this complaint, the said 

Joel Starrels was a registered floor broker under the Commodity Exchange Act and 

a non-clearing member of the Chicago Board of Trade. 

IV 

Respondent James T. McKerr and Company is a partnership composed of 

respondents James T. McKerr and Charles J. McKerr, and has offices at Room 1045, 

Board of Trade Building, 141 West Jackson Blvd. Chicago 4, Illinois. At all 

times material to this complaint, the said partnership was a registered futures 

commission merchant under the Commodity Exchange Act and a clearing member of 
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the Chicago Board of Trade, and at all such times respondents James T. McKerr 

and 

Charles J. McKerr were registered floor brokers under the Commodity Exchange Act 

and members of the Chicago Board of Trade. 

V 

Respondent Gilbert D. Mathy, an individual whose business address is Room 

1042, Board of Trade Building, 141 West Jackson Blvd., Chicago 4, Illinois, is a 

trader in commodity futures. At all times material to this complaint, the said 

Gilbert D. Mathy was a registered floor broker under the Commodity Exchange Act 

and a non-clearing member of the Chicago Board of Trade. 

VI 

Uhlmann Grain Company and A. J. Riffel and Company, not respondents herein, 

were at the times hereinafter mentioned registered futures commission merchants 

under the Commodity Exchange Act and clearing members of the Chicago Board of 

Trade. 

VII 

During the period from January 1952 through July 1953, respondent Edward R. 

Byer traded extensively in commodity futures on the Chicago Board of Trade by 

means of three accounts in his own name, carried by Uhlmann Grain Company, A. J. 

Riffel and Company, and respondent James T. McKerr and Company. From time to 

time during the said period, respondent Edward R. Byer also caused the entry and 

recording of commodity futures transactions which belonged to 

him in six other accounts, which appeared under the following names and 

designations. 

Account Carried With 

Joel Starrels, No. 510 Special Uhlmann Grain Company 

James T. McKerr, No. 303 Special James T. McKerr and Company 

Charles J. McKerr, Special James T. McKerr and Company 

Gilbert D. Mathy A. J. Riffel and Company 

William M. Dunn A. J. Riffel and Company 

George B. O'Connell A. J. Riffel and Company 

Respondent Edward R. Byer executed or caused the execution of certain 

transactions in commodity futures through or by means of the above described 

accounts carried in the names of other persons, in order to conceal from the 

Commodity Exchange Authority trades and positions in commodity futures which 

were in excess of the maximum limits established by the Commodity Exchange 

Commission, and in furtherance of such concealment all of the respondents 

wilfully violated various provisions of the Commodity Exchange Act, as 

hereinafter described. 

Transactions in Oats Futures 

VIII 

Between November 26, 1952, and December 2, 1952, both inclusive, and between 

February 9, 1953, and March 27, 1953, both inclusive, respondent Edward R. 

Byer's net open contract position in oats 

futures on the Chicago Board of Trade ranged between 2,370,000 bushels and 

3,295,000 bushels, exclusive of hedging and spreading transactions. On numerous 

occasions during these periods, including November 28, 1952, February 16, 1953, 

March 17, 1953, and March 20, 1953, transactions in oats futures, on the Chicago 

Board of Trade were executed by or for the use and benefit of the said 
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respondent and were entered in accounts carried in his own name or in the names 

of other persons, as described in paragraph VII. By reason of such position and 

transactions, the said respondent traded in oats for future delivery on or 

subject to the rules of a contract market in amounts which resulted in positions 

in excess of the maximum permissible quantity, in wilful violation of section 4a 

of the Commodity Exchange Act (7 U.S.C. 6a) and the order of the Commodity 

Exchange Commission establishing limits on trading and positions in oats for 

future delivery (17 CFR 150.1). 

IX 

At all times between November 26, 1952, and March 30, 1953, both inclusive, 

respondent Edward R. Byer held open contracts in one oats future on the Chicago 

Board of Trade equal to or in excess of 200,000 bushels. By reason of such 

position, the said respondent was required to report to the Commodity Exchange 

Authority during such period, with respect to all transactions and open contract 

positions in all oats futures in accounts owned or controlled by him, as 

provided in section 4i of the Commodity Exchange Act (7 U.S.C. 6i) and sections 

2.00, 2.10, 2.11, 2.12, and 2.21 of the rules and regulations thereunder (17 CFR 

2.00, 2.10, 2.11, 2.12, 2.21). During such period, the said respondent 

submitted approximately thirty-four (34.) reports to the Commodity Exchange 

Authority which showed that his net open contract position in oats futures on 

the Chicago Board of Trade ranged from 660,000 bushels to 1,980,000 bushels, and 

which purported to include all of the respondent's trading in oats futures 

during this period. In truth and in fact, the said respondent's net open 

contract position in oats futures on the Chicago Board of Trade during the said 

period ranged from 1,010,000 bushels to 3,295,000 bushels, and the reports 

submitted by him included only his trading and positions in oats futures in the 

accounts carried in his own name, and did not include trades or positions in 

oats futures, executed or held for his use and benefit in accounts carried in 

the names of other persons. By reason thereof, respondent Edward R. Byer 

submitted false reports to the Commodity Exchange Authority, in wilful violation 

of the aforementioned provisions of the act and of the rules and regulations 

thereunder. 

X 

(a) At the close of business on November 26, 1952, respondent Edward R. 

Byer's account on the books of A. J. Riffel and Company had a net long open 

contract position in oats futures on the Chicago 

Board of Trade of 1,960,000 bushels. On the said date respondent Joel Starrels 

purchased 930,000 bushels of December 1952 oats futures on the floor of the 

Chicago Board of Trade, entered the said purchases on his trading card, caused 

such purchases to be recorded in an account which he directed to be opened and 

which he designated as "Joel Starrels No. 510 Special" on the books of the 

Uhlmann Grain Company, and submitted reports to the Commodity Exchange Authority 

which showed that such purchases were made for the account of, and that the 

resulting position was held by, respondent Joel Starrels. In truth and in fact, 

the said purchases were made for the use and benefit of respondent Edward R. 

Byer, and the resulting position was held for him and was subject to his 

direction and control, but respondent Edward R. Byer did not include such 

purchases or position in reports which he submitted to the Commodity Exchange 

Authority. Due to such purchases, respondent Edward R. Byer had a net long open 

contract position in oats futures on the Chicago Board of Trade of more than 

2,000,000 bushels, exclusive of hedging and spreading transactions, to wit, 

2,890,000 bushels. The recording of the said purchases in the Joel Starrels No. 

510 Special account was intended and carried out by respondents Edward R. Byer 

and Joel Starrels for the purpose and with the effect of concealing from the 
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Commodity Exchange Authority the fact that respondent Edward R. Byer's position 

in oats futures on the Chicago Board of Trade was over 2,000,000 bushels. 

(b) By reason of such acts, respondent Edward R. Byer traded in oats for 

future delivery on or subject to the rules of a contract market in an amount 

which resulted in a position in excess of the maximum permissible quantity, in 

wilful violation of section 4a of the Commodity Exchange Act (7 U.S.C. 6a) and 

the order of the Commodity Exchange Commission established limits on trading and 

positions in oats for future delivery (17 CFR. 150.1); and failed to keep 

required records and submitted false reports to the Commodity Exchange 

Authority, in wilful violation of section 4i of the Commodity Exchange Act (7 

U.S.C. 6i) and sections 2.00, 2.10, 2.11, 2.12, 2.14, and 2.21 of the rules and 

regulations thereunder (17 CFR 2.00, 2.10, 2.11, 2.12, 2.14, 2.21). 

(c) By reason of such acts, respondent Joel Starrels executed a futures 

contract on a board of trade and failed to evidence the same by a written record 

which showed the true parties to such contract, in wilful violation of section 4 

of the Commodity Exchange Act (7 U.S.C. 6) and section 1.37 of the rules and 

regulations thereunder (17 CFR 1.37); wilfully entered false records of futures 

contracts made on behalf of another person, in violation of section 4b of the 

Commodity Exchange Act (7 U.S.C. 6b); and submitted false reports to the 

Commodity Exchange Authority, in wilful violation of section 4i of the Commodity 

Exchange Act (7 U.S.C. 6i) and sections 2.00, 2.10, 2.11, 2.12, and 2.21 of the 

rules and regulations thereunder (17 CFR 2.00, 2.10, 2.11, 2.12, 2.21). 

XI 

(a) As of December 23, 1952, there was a profit in the Joel Starrels No. 510 

Special account, which had accrued as a result of the purchases described in 

paragraph X. On that date, respondent Joel Starrels entered on his trading card 

a purchase of 250,000 bushels of January 1953 soybean futures from respondent 

James T. McKerr and a sale of the same quantity of the same future to respondent 

James T. McKerr at a price two and one-half (2 1/2) cents per bushel lower, and 

caused such transactions to be recorded in his personal account on the books of 

the Uhlmann Grain Company, with the result that the loss arising therefrom was 

debited against the said account. Simultaneously, respondent James T. McKerr 

entered on his trading card a purchase of 250,000 bushels of January 1953 

soybean futures from respondent Joel Starrels and a sale of the same quantity of 

the same future to respondent Joel Starrels at a price two and one-half (2 1/2) 

cents per bushel higher, and caused such transactions to be recorded in an 

account designated as "James T. McKerr No. 303 Special" on the books of 

respondent James T. McKerr and Company, with the result that the reciprocal 

profit arising out of such transactions was credited to the said account. On 

the same date, respondent James T. McKerr entered on his trading card a purchase 

of 250,000 bushels of March 1953 soybean futures from respondent Edward R. Byer 

and a sale. of the same quantity of the same future to respondent Edward R. Byer 

at a price 

two and one-half (2 1/2) cents per bushel lower, and caused such transactions to 

be recorded in the James T. McKerr No. 303 Special account on the books of 

respondent James T. McKerr and Company, with the result that the loss arising 

therefrom was debited against the said account. Simultaneously, respondent 

Edward R. Byer entered on his trading card a purchase of 250,000 bushels of 

March 1953 soybean futures from respondent James T. McKerr and a sale of the 

same quantity of the same future to respondent James T. McKerr at a price two 

and one-half (2 1/2) cents per bushel higher, and caused such transactions to be 

recorded in the Edward R. Byer account on the books of A. J. Riffel and Company, 

with the result that the reciprocal profit arising out of such transactions was 

credited to the said account of respondent Edward R. Byer. The transactions 

above described were not entered into for the purpose of buying or selling 

commodity futures, but were intended and carried out solely for the purpose of 
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transferring from respondent Joel Starrels to respondent Edward R. Byer 

substantially the amount of the profit which had accrued as a result of the 

transactions described in paragraph X. 

(b) By reason of such acts, respondents Edward R. Byer, Joel Starrels, James 

T. McKerr, and James T. McKerr and Company offered to enter into, entered into, 

and confirmed the execution of transactions which were wash sales or were of the 

character of wash sales, in wilful violation of section 4c of the Commodity 

Exchange Act (7 U.S.C. 6c). 

XII 

(a) At the close of business on February 8, 1953, respondent Edward R. Byer 

had a net long open contract position in oats futures on the Chicago Board of 

Trade of 1,545,000 bushels in his accounts carried in his own name, and 300,000 

bushels in accounts carried in the names of others. On February 9, 1953, 

respondent Edward R. Byer, in an office trade involving the exchange of futures 

for a cash commodity, purchased 750,000 bushels of March 1953 oats futures, 

caused the transaction to be entered in his account on the books of A. J. Riffel 

and Company as a purchase of 435,000 bushels, and submitted reports to the 

Commodity Exchange Authority which showed that the said respondent had purchased 

435,000 bushels and held a net long position of 1,980,000 bushels. Respondent 

Edward R. Byer did not report the balance of 315,000 bushels of the said 

purchase to the Commodity Exchange Authority, but caused false entries to be 

made on the trading cards of William M. Dunn and George B. O'Connell, not 

respondents herein, and in the accounts of the said William M. Dunn and George 

B. O'Connell on the books of A. J. Riffel and Company, which entries purported 

to show that the said William M. Dunn and George B. O'Connell had that day 

purchased 190,000 bushels and 125,000 bushels, respectively, of March 1953 oats 

futures. In truth and in fact, no such transactions had been executed, the 

entire purchase of 750,000 bushels of March 1953 oats futures having been made 

by respondent Edward R. Byer for his own use and benefit, as above described. 

(b) On the same date (February 9, 1953), respondent James T. McKerr purchased 

1,000,000 bushels and sold 300,000 bushels of March 1953 oats futures on the 

floor of the Chicago Board of Trade, entered the said purchases and sales on his 

trading card, caused corresponding entries to be made in the James T. McKerr No. 

303 Special account on the books of respondent James T. McKerr and Company, and 

submitted reports to the Commodity Exchange Authority which showed that such 

purchases and sales were made for the account of, and that the resulting 

positions were held by, respondent James T. McKerr. In truth and in fact, the 

said purchases and sales were made for the use and benefit of respondent Edward 

R. Byer and the resulting positions were held for him and were subject to his 

direction and control, but respondent Edward R. Byer did not include such 

purchases, sales, or position in reports which he submitted to the Commodity 

Exchange Authority. 

(c) Due to the transactions described in paragraphs XII (a) and XII (b), 

respondent Edward R. Byer's not long open contract position in oats futures on 

the Chicago Board of Trade was over 2,000,000 bushels, exclusive of hedging and 

spreading transactions, to wit, 3,295,000 bushels. The false entries on the 

trading cards and in the accounts of the said William M. Dunn and George B. 

O'Connell were caused to be made by respondent Edward R. Byer, and the entries 

of the above described purchases and sales in the James T. 

 

McKerr No. 303 Special account were intended and carried cut by respondents 

Edward R. Byer, James T. McKerr, and James T. McKerr and Company for the purpose 

and with the effect of concealing from the Commodity Exchange Authority the fact 

that respondent Edward R. Byer's position in oats futures on the Chicago Board 

of Trade was over 2,000,000 bushels. 
Page 6 

(d) By reason of such acts, respondent Edward R. Byer traded in oats for 

future delivery on or subject to the rules of a contract market in amount which 

resulted in a position in excess of the maximum permissible quantity, in wilful 

violation of section 4a of the Commodity Exchange Act (7 U.S.C. 6a), and the 

order of the Commodity Exchange Commission establishing limits on trading and 

positions in oats for future delivery (17 CFR 150.1); and failed to keep 

required records and submitted false reports to the Commodity Exchange 

Authority, in wilful violation of Section 4i of the Commodity Exchange Act (7 

U.S.C. 6i) and sections 2.00, 2.10, 2.11, 2.12, 2.14, and 2.21 of the rules and 

regulations thereunder (17 CFR 2.00, 2.10, 2.11, 2.12, 2.14, 2.21). 

(e) By reason of such acts, respondents James T. McKerr and James T. McKerr 

and Company executed futures contracts on a board of trade and failed to 

evidence the same by a written record which showed the true parties to such 

contracts, in wilful violation of section 4 of the Commodity Exchange Act (7 

U.S.C. 6) and section 1.37 of the rules and regulations thereunder (17 CFR 

1.37); willfully 

 

entered false records of futures contracts made on behalf of another person, in 

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

keep records of a commodity futures account showing the true name of the person 

for whom the account was carried, in wilful violation of section 4g of the 

Commodity Exchange Act (7 U.S.C. 6g) and section 1.37 of the rules and 

regulations thereunder (17 CFR 1.37); and failed to keep required records and 

submitted false reports to Commodity Exchange Authority, in wilful violation of 

section 4i of the Commodity Exchange Act (7 U.S.C. 6i) and sections 2.00, 2.04, 

2.05, 2.06, 2.07, 2.08, 2.10, 2.11, 2.12, 2.14, 2.20 and 2.21 of the rule's and 

regulations thereunder (17 CFR 2.00, 2.04, 2.05, 2.06, 2.07, 2.08, 2.10, 2.11, 

2.12, 2.14, 2.20, 2.21). 

XIII 

(a) On February 13, 1953, respondent Edward R. Byer sold 300,000 bushels of 

March 1953 oats futures on the floor of the Chicago Board of Trade and entered 

the said sale on his trading card. Respondent Edward R. Byer did not report 

such sale to the Commodity Exchange Authority, but deleted the entry on his own 

trading card and caused false entries to be made on the trading cards of the 

above mentioned William M. Dunn and George B. O'Connell, and in their accounts 

on the books of A. J. Riffel and Company, which entries purported to show that 

the said William M. Dunn and George B. O'Connell had that day sold 190,000 

bushels and 110,000 bushels, 

 

respectively, of March 1953 oats futures on the Chicago Board of Trade. In 

truth and in fact, no such transactions had been executed, the entire sale of 

300,000 bushels of March 1953 oats futures having been made by respondent Edward 

R. Byer for his own use and benefit, as above described. 

(b) On the same date respondent Edward R. Byer sold an additional 300,000 

bushels of March 1953 oats futures and bought 300,000 bushels of May 1953 oats 

futures on the floor of the Chicago Board of Trade. Respondent Edward R. Byer 

did not report such purchase and sale to the Commodity Exchange Authority, but 

caused false entries to be made on the trading cards of respondent James T. 

McKerr, which entries purported to show that respondent James T. McKerr had that 

day bought 300,000 bushels of May 1953 oats futures and sold 300,000 bushels of 

March 1953 oats futures on the Chicago Board of Trade. Such false entries were 

made with the knowledge and consent of respondent James T. McKerr, who caused 

similar entries to be made in the James T. McKerr No. 303 Special account on the 

books of respondent James T. McKerr and Company and submitted reports to the 

Commodity Exchange Authority which showed that such purchase and sale were made 

for the account of and that the resulting positions were held by respondent 

James T. McKerr. In truth and in fact, no such transactions had been executed, 
Page 7 

the purchase of 300,000 bushels of May 1953 oats futures and the sale of 300,000 

bushels of March 1953 oats futures having been made by respondent 

 

Edward R. Byer for his own use and benefit, as above described. The said 

entries and reports were intended to be and were made by respondents Edward R. 

Byer, James T. McKerr, and James T. McKerr and Company for the purpose and with 

the effect of concealing from the Commodity Exchange Authority the fact that the 

said transactions were executed for the use and benefit of respondent Edward R. 

Byer. 

(c) By reason of such acts, respondent Edward R. Byer failed to keep required 

records and submitted false reports to the Commodity Exchange Authority in 

wilful violation of section 4i of the Commodity Exchange Act (7 U.S.C. 6i) and 

sections 2.00, 2.10, 2.11, 2.12, 2.14, and 2.21 of the rules and regulations 

thereunder (17 CFR 2.00, 2.10, 2.11, 2.12, 2.14, 2.21). 

(d) By reason of the acts described in paragraph XIII (b), respondents James 

T. McKerr and James T. McKerr and Company wilfully entered false records of 

futures contracts made on behalf of another person, in violation of section 4b 

of the Commodity Exchange Act (7 U.S.C. 6b); failed to keep records of a 

commodity futures account showing the true name of the person for whom the 

account was carried, in wilful violation of section 4g of the Commodity Exchange 

Act (7 U.S.C. 6g) and section 1.37 of the regulations thereunder (17 CFR 1.37); 

and failed to keep required and submitted false reports to the Commodity 

Exchange Authority in wilful violation of 

 

section 4i of the Commodity Exchange Act (7 U.S.C. 6i) and sections 2.00, 2.04, 

2.05 2.06, 2.07, 2.08, 2.10, 2.11, 2.12, 2.14, 2.20, and 2.21 of the rules and 

regulations thereunder (17 CFR 2.00, 2.04, 2.05, 2.06, 2.07, 2.08, 2.10, 2.11, 

2.12, 2.14, 2.20, 2.21). 

Transactions in Wheat Futures 

XIV 

(a) At the close or business on January 24, 1952, respondent Edward R. Byer 

had a net long open contract position in wheat futures on the Chicago Board of 

Trade of 1,945,000 bushels, exclusive of hedging and spreading transactions, and 

so reported to the Commodity Exchange Authority. On January 25, 1952, the said 

respondent purchased 235,000 bushels and sold 210,000 bushels of wheat futures 

on the Chicago Board of Trade, including 175,000 bushels recorded as sold to 

respondent James T. McKerr and entered as a purchase in the James T. McKerr No. 

303 Special account on the books of James To McKerr and Company. Respondent 

Edward R. Byer submitted reports to the Commodity Exchange Authority which 

listed the aforementioned transactions and purported to show that, as a result 

thereof, the said respondent's net long open contract position in wheat futures 

on the Chicago Board of Trade as of January 24, 1952, had been increased by 

25,000 bushels to a total position of 1,970,000 bushels. In truth and in fact, 

such position had actually been increased by 200,000 bushels 

 

to a total position of 2,145,000 bushels because the aforementioned transaction 

of 175,000 bushels between respondent Edward R. Byer and respondent James T. 

McKerr was not a bona fide sale and purchase, but merely the transfer of a 

futures position from the books of A. J. Riffel and Company to the books of 

respondent James T. McKerr and Company, and the resulting open contracts in the 

James T. McKerr No. 303 Special account were intended to be and were held for 

the use and benefit of respondent Edward R. Byer and were subject to his 

direction and control. The said transaction of 175,000 bushels was intended for 

the purpose and had the effect of concealing from the Commodity Exchange 
Page 8 

Authority the fact that respondent Edward R. Byer's position in wheat futures on 

the Chicago Board of Trade was over 2,000,000 bushels. 

(b) At all times from January 25, 1952, through February 14. 1952, from 

February 20, 1952, through February 25, 1952. from March 20, 1952, through March 

24, 1952, and from June 3, 1952 through July 1, 1952, respondent Edward R. 

Byer's net long open contract position in wheat futures on the Chicago Board of 

Trade ranged between 2,040,000 bushels and 2,750,000 bushels, exclusive of 

hedging and spreading transactions. On February 25, 1952, respondent Edward R. 

Byer entered on his trading card a purchase of 100,000 bushels of March 1952 

wheat futures from respondent James T. McKerr and a sale of 100,000 bushels of 

December 1952 wheat futures to 

 

respondent James T. McKerr, and reported such transactions to the Commodity 

Exchange Authority. On June 14, 1952, and June 18, 1952, respondent Edward R. 

Byer entered on his trading card sales of 175,000 bushels and 400,000 bushels, 

respectively, of wheat futures to respondent James T. McKerr and reported such 

sales to the Commodity Exchange Authority. Respondent James T. McKerr entered 

the opposite sides of these transactions on his trading cards, and caused 

similar entries to be made in the James T. McKerr No. 303 Special account on the 

books of respondent James T. McKerr and Company. Respondents James T. McKerr 

and James T. McKerr and Company submitted reports to the Commodity Exchange 

Authority which showed that such transactions had been made for and that the 

resulting positions were held by respondent James T. McKerr. In truth and in 

fact the above transaction were not bona fide sales and purchases but merely 

transfers of futures positions between the books of A. J. Riffel and Company and 

the books of respondent James T. McKerr and Company, and the resulting open 

contracts in the James T. McKerr No. 303 Special account were intended to be and 

were held for the use and benefit of respondent Edward R. Byer and were subject 

to his direction and control. The said transactions were intended for the 

purpose and had the effect of concealing from the Commodity Exchange Authority 

the fact that respondent Edward R. Byer's position in wheat futures on the 

Chicago Board of Trade was over 2,000,000 bushels. 

(c) On numerous other occasions during the above periods, including January 

31, 1952, February 13, 1952, February 20, 1952, February 23, 1952, March 20, 

1952, March 21, 1952, June 3, 1952, June 11, 1952, June 16, 1952 and June 19, 

1952, transactions in wheat futures on the Chicago Board of Trade were executed 

by or for the use and benefit of respondent Edward R. Byer, and were entered in 

accounts carried in his own name, or in the James T. McKerr No. 303 Special 

account on the books of respondent James T. McKerr and Company. 

(d) By reason of such acts, respondent Edward R. Byer traded in wheat for 

future delivery on or subject to the rules of a contract market in amounts which 

resulted in positions in excess of the maximum permissible quantity, in wilful 

violation of section 4a of the Commodity Exchange Act (7 U.S.C. 6a), and the 

order of the Commodity Exchange Commission establishing limits on trading and 

positions in wheat for future delivery (17 CFR 150.1) and failed to keep 

required records and submitted false reports to the Commodity Exchange Authority 

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

and sections 2.00, 2.10, 2.11, 2.12, 2.14, and 2.21 of the rules and regulations 

thereunder (17 CFR 2.00, 2.10, 2.11, 2.12, 2.14, 2.21). 

(e) By reason of such acts, respondents James T. McKerr and James T. McKerr 

and Company wilfully entered false records of 

 

futures contracts made on behalf of another person, in violation of section 4b 

of the Commodity Exchange Act (7 U.S.C. 6b); failed to keep records of a 

commodity futures account showing the true name of the person for whom the 
Page 9 

account was carried, in wilful violation of section 4g of the Commodity Exchange 

Act (7 U.S.C. 6g) and section 1.37 of the rules and regulations thereunder, and 

failed to keep required records and submitted false reports to the Commodity 

Exchange Authority, in wilful violation of section 4i of the Commodity Exchange 

Act (7 U.S.C. 6i) and sections 2.00, 2.04, 2.05, 2.06, 2.07, 2.08, 2.10, 2.11, 

2.12, 2.14, 2.20, anf 2.21 of the rules and regulations thereunder (17 CFR 2.00, 

2.05, 2.06, 2.07, 2.08, 2.10, 2.11, 2.12, 2.14, 2.20, 2.21). 

Transactions in Corn Futures 

XV 

(a) On July 1, 1952, on July 17, 1952, on July 18, 1952, and at all times 

from July 26, 1952, through August 1, 1952, and from August 6, 1952, through 

August 12, 1952, respondent Edward R. Byer's net open contract position in corn 

futures on the Chicago Board of Trade ranged between 2,100,000 bushels and 

3,220,000 bushels, exclusive of hedging and spreading transactions. On July 28, 

1952, and August 11, 1952, respondent Edward R. Byer entered on his trading 

cards sales of 300,000 bushels and 440,000 bushels, respectively, of corn 

futures to respondent James T. Mckerr, and reported such 

 

sales to the Commodity Exchange Authority. Respondent. James TV; McKerr 

entered the purchase of this transaction trading cards and caused similar 

entries to be made in the James T. McKerr No. 303 Special account on the books 

of respondent James T. McKerr and Company Respondents; James; T. McKerr and 

James T. McKerr. and Company submitted reports to the Commodity Exchanger 

Authority which showed that such purchases had been made for and that the 

resulting positions were held by respondent James T. McKerr. On July1, 1952, 

and July 29, 1952, respondent. Edward R. Byer entered on his trading cards 

sales of 245,000 bushels and 600,000 bushels respectively of corn futures to 

respondent Charles J. McKerr, and reported such sales to the Commodity Exchange 

Authority Respondent Charles J. McKerr entered the purchase side of these trans 

actions on his trading cards and caused similar entries to be made in the 

Charles J. McKerr Special account on the books of James T. McKerr and Company. 

Respondents Charles J, McKerr and Company, and the resulting open contracts in 

the 

 

James T. McKerr No. 303 Special and in the Charles J. McKerr Special accounts 

were intended to be and were held for the use and benefit of respondent Edward 

R. Byer and were subject to his direction and control. The said transactions 

were intended for the purpose and had the effect of concealing from the 

Commodity Exchange Authority the fact that respondent Edward R. Byer's position 

in corn futures on the Chicago Board of Trade was over 2,000,000 bushels. 

(b) On numerous other occasions during these periods, including July 17, 

1952, July 18, 1952, July 26, 1952, August 6, 1952, August 7, 1952, and August 

8, 1952, transactions in corn futures on the Chicago Board of Trade were 

executed by or for the use and benefit of respondent Edward R. Byer and were 

entered in accounts carried in his own name, or in the James T. McKerr No. 303 

Special or Charles J. McKerr Special accounts on the books of respondent James 

T. McKerr and Company. All corn futures purportedly purchased and sold by the 

said James T. McKerr No. 303 Special and Charles J. McKerr Special accounts 

during the above described periods were entered as purchases from or sales to 

respondent Edward R. Byer. 

(c) By reason of such acts, respondent Edward R. Byer traded in corn for 

future delivery on or subject to the rules of a contract market in amounts which 

resulted in positions in excess of the maximum permissible quantity, in wilful 

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

order of the 

 
Page 10 

Commodity Exchange Commission establishing limits on trading and positions in 

corn for future delivery (17 CFR 150.1); and failed to keep required records and 

submitted false reports to the Commodity Exchange Authority in wilful violation 

of section on 4i of the Commodity Exchange Act (7 U.S.C. 6i) and sections 2.00, 

2.10, 2.11, 2.12, 2.14, and 2.21 of the rules and regulations thereunder (17 CFR 

2.00, 2.10, 2.11, 2.12, 2.14, 2.21). 

(d) By reason of such acts, respondents James T. McKerr, Charles J. McKerr, 

and James T. McKerr and Company wilfully entered false records of futures 

contracts made on behalf of another person, in violation of section 4b of the 

Commodity Exchange Act (7 U.S.C. 6b); failed to keep records of a commodity 

futures account showing the true name of the person for whom the account was 

carried, in wilful violation of section 4g of the Commodity Exchange Act (7 

U.S.C. 6g) and section 1.37 of the rules and regulations thereunder (17 CFR 

1.37); and failed to keep required records and submitted false reports to the 

Commodity Exchange Authority in wilful violation of section 4i of the Commodity 

Exchange Act (7 U.S.C. 6i) and sections 2.00, 2.04, 2.05, 2.06, 2.07, 2,08, 

2.10, 2.11, 2.12, 2.14, 2.20, and 2.21 of the rules and regulations thereunder 

(17 CFR 2.00, 2.04, 2.05, 2.06, 2.07, 2.08, 2.10, 2.11, 2.12, 2.14, 2.20, 2.21). 

XVI 

(a) On August 13, 1952, respondent Edward R. Byer sold 355,000 bushels of 

September 1952 corn futures and 1,400,000 bushels of 

 

December 1952 corn futures on the floor of the Chicago Board of Trade and 

reported such sales to the Commodity Exchange Authority. On the same date, 

respondent Edward R. Byer sold an additional 1,000,000 bushels of December 1952 

corn futures on the floor of the Chicago Board of Trade to one Vincent M. Fagan 

not a respondent herein, at $ 1.75 3/8 per bushel. Respondent Edward R. Byer 

did not enter such sale on his trading card, or report it to the Commodity 

Exchange Authority, but caused false entries to be made on the trading card of 

respondent Gilbert D. Mathy and in the account of the said Gilbert D. Mathy on 

the books of A. J. Riffel and Company, which entries purported to show that 

respondent Gilbert D. Mathy had that day purchased for his own account 1,000,000 

bushels of December 1952 corn futures at $ 1.75 3/8 per bushel from James T. 

McKerr and Company, and had that day sold for his own account the same quantity 

of the same future at the same price to the aforementioned Vincent M. Fagan 

Respondent Edward R. Byer also caused entries to be made on the trading cards of 

respondents James T. McKerr and Charles J. McKerr, and in the James T. McKerr 

No. 303 Special and Charles J. McKerr Special accounts on the books of 

respondent James T. McKerr and Company, which entries purported to show that the 

said accounts had that day sold to A. J. Riffel and Company (clearer for 

respondent Gilbert D. Mathy) 1,000,000 bushels of December 1952 corn futures at 

$ 1.75 3/8 per bushel. The above described false entries on the 

 

trading cards of respondent Gilbert D. Mathy and in the account of the said 

respondent on the books of A. J. Riffel and Company were made with the 

knowledge, consent, and cooperation of respondent Gilbert D. Mathy, who reported 

or caused to be reported to the Commodity Exchange Authority that such 

transactions had been executed and that the resulting positions were held by 

him. In truth and in fact, such transactions were fictitious and were entered 

into by respondent Gilbert D. Mathy not for the purpose of buying or, selling 

commodity futures, but solely for the purpose and with the effect of 

accommodating respondent Edward R. Byer and enabling him to disguise his sale to 

the said Vincent M. Fagan as a transaction between respondent Gilbert D. Mathy 

and the said Vincent M. Fagan As a result thereof, respondent Edward R. Byer 

concealed from the Commodity Exchange Authority the fact that he had that day 

traded in corn futures in an amount in excess of 2,000,000 bushels. 
Page 11 

(b) By reason of such acts, respondent Edward R. Byer traded in corn for 

future delivery on or subject to the rules of a contract market in an amount in 

excess of the maximum amount permitted during any one business day, in wilful 

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

order of the Commodity Exchange Commission establishing limits on trading and 

positions in corn for future delivery (17 CFR 150.1), and failed to keep 

required records and submitted false reports to the Commodity 

 

Exchange Authority in wilful violation of section 4i of the Commodity Exchange 

Act (7 U.S.C. 6i) and sections 2.00, 2.10, 2.11, 2.12, 2.14, and 2.21 of the 

rules and regulations thereunder (17 CFR 2.00, 2.10, 2.11, 2.12, 2.14, 2.21). 

(c) By reason of such acts, respondent Gilbert D. Mathy offered to enter 

into, entered into, and confirmed the execution of transactions which were 

fictitious, in wilful violation of section 4c of the Commodity Exchange Act (7 

U.S.C. 6c). 

XVII 

The transactions in oats, soybeans, wheat, and corn futures described herein 

were capable of being used for (1) hedging a transaction in interstate commerce 

in oats, soybeans, wheat, or corn, respectively, or the products or byproducts 

thereof, or (2) determining the price basis of a transaction in interstate 

commerce in oats, soybeans, wheat, or corn respectively, or (3) delivering oats, 

soybeans, wheat, or corn, respectively, sold, shipped, or received in interstate 

commerce. 

Therefore, the said respondents, Edward R. Byer, Joel Starrels, James T. 

McKerr and Company, James T. McKerr, Charles J. McKerr, and Gilbert D. Mathy, 

are hereby notified to be and appear at a hearing to be held at 10:00 a.m. 

Central Daylight Saving Time. on the 22nd day of June 1954, in Room 1200, Board 

of Trade 

 

Building, 141 West Jackson Blvd., Chicago, Illinois, before a referee designated 

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 refuse all trading 

privileges to the respondents for. such period of time, as may be determined by 

the Secretary of Agriculture and suspending or revoking the registrations of 

those respondents who are registered as futures commission merchants or floor 

brokers. 

The respondents will have 20 days after, the receipt of this notice of 

hearing to file with the Hearing Clerk, United States Department of Agriculture, 

Washington 25, D. C., an answer with an original and seven copies, fully and 

completely stating the nature of the defense and admitting or denying 

specifically and in detail each material and relevant allegation of the 

complaint. Allegations that are not answered will be deemed admitted for the 

purpose of this proceeding. 

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

respondents by delivery of a true copy thereof by an employee of the Department 

of Agriculture, or by registered mail, at least 20 days prior to the date set 

for hearings 

Done at Washington, D. C., this 

14 day of April, 1954 

/s/ Ezra Taft Benson 

Secretary of Agriculture 
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UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Lee B. Stern 

Stipulation of Compliance under the Commodity Exchange Act No. 62 

The Secretary of Agriculture has reason to believe that Lee B. Stern has 

violated the provisions of the Commodity Exchange Act (7 U.S.C., Chapter 1) and 

the orders of the Commodity Exchange Commission establishing limits on positions 

and daily trading in rye and soybeans for future delivery. (17 CFR 150.3-150.4) 

No complaint with respect to such violations has been issued and the said Lee 

B. Stern is desirous of disposing of the matter by entering into a stipulation 

of compliance as authorized by section 0.4(a) of the rules of practice under the 

Commodity Exchange Act (17 CFR 0.0-0.28). Therefore, the said Lee B. Stern 

stipulates the following facts are true: 

1. Lee B. Stern, an individual whose address is 141 West Jackson Boulevard, 

Chicago 4, Illinois, is now and was at all times mentioned herein a registered 

floor broker under the Commodity Exchange Act and a member of the Board of Trade 

of the City of Chicago. 

2. The transactions herein described were entered into by Lee B. Stern on the 

Board of Trade of the City of Chicago, a duly designated contract market under 

the Commodity Exchange Act. 

3. On July 20, 1962, Lee B. Stern made the following speculative purchase of 

rye futures: 

Futures Bushels 

July 1962 165,000

September 1962 175,000

December 1962 205,000

March 1963 75,000

May 1963 10,000 Total 630,000

4. On July 23, 1962, Lee B. Stern made speculative purchases and sales of 

90,000 and 765,000 bushels, respectively, in the November 1962 soybean future, 

resulting in his holding a net short speculative position of 2,125,000 bushels 

in the November 1962 soybean future. 

The purchases of rye futures by the said Lee B. Stern on July 20, 1962, were 

in excess of the maximum amount of such purchases permitted by the order of the 

Commodity Exchange Commission establishing limits on positions and daily trading 

in rye for future delivery. The sales of soybean futures on July 23, 1962, 

resulted in the said Lee B. Stern holding a position in excess of the maximum 

net short speculative position permitted by the order of the Commodity Exchange 

Commission establishing limits on positions and daily trading in soybeans for 

future delivery. Therefore, such trading and position were in violation of such 

orders and of section 4a of the Commodity Exchange Act (7 U.S.C. 6a, 17 CFR 

150.3-150.4). Previous transactions made and 

 

positions held by the said Lee B. Stern in excess of limits set by the Commodity 

Exchange Commission were called to his attention by the Act Administrator in a 

letter dated March 16, 1961. 

The said Lee B. Stern agrees to desist from such acts in the future. He 

further understands and agrees that this stipulation is admissible as evidence 

of such acts in any future proceeding based upon acts or practices in addition 

to those referred to herein which may be brought by the Secretary of Agriculture 

against him under the provisions of the said act. He also understands that it 
Page 13 

is the practice of the Commodity Exchange Authority to make stipulations of 

compliance a matter of public record. 

Done at Chicago, Illinois, this 

20th day of August 1962. 

/s/ Lee B. Stern 

Lee B. Stern 

Witnessed by: 

/s/ Robert M. Ollquist 

/s/ Roger E. Harper 

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