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Commodity Futures Trading Commission 

CEA CASES 

NAME: SECRETARY OF AGRICULTURE V. HUGH S. GAMBLE AND STEPHEN A. BURKE 

DOCKET NUMBER: 8 

DATE: SEPTEMBER 20, 1938 

DOCUMENT TYPE: DECISION AND ORDER 

DEPARTMENT OF AGRICULTURE 

Washington, D. C. 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

C. E. A. DOCKET NO. 8 

Secretary of Agriculture, Complainant, vs. Hugh S. Gamble and Stephen A. Burke, 

Respondents. 

Findings of Fact, Conclusions and Order. 

This proceeding was instituted by the Secretary of Agriculture on August 5, 

1938, through the filing of a complaint requiring the respondents Hugh S. Gamble 

and Stephen A. Burke to show cause why an order should not be entered directing 

all contract markets to refuse them all trading privileges until further notice 

of the Secretary of Agriculture. 

It is charged in the complaint, among other things, that the respondents 

between June 1, 1937 and December 31, 1937, at Sioux Falls, South Dakota, acting 

by and through the means of Burke & Company, a corporation organized under the 

laws of the State of South Dakota, did engage as futures commission merchants in 

soliciting and accepting orders for the purchase and sale of commodities for 

future delivery, involving contracts of sale of such commodities for future 

delivery on or subject to the rules of the Board of Trade of the City of 

Chicago, a contract market designated by the Secretary of Agriculture pursuant 

to the provision of the Commodity Exchange Act, and while so engaged did accept 

orders from various persons for the purchase and sale of grain and other 

commodities as defined in the Commodity Exchange Act for future delivery and did 

receive funds from said persons to margin and guarantee the respective trades 

and contracts of said persons in such commodities and, at such times and places 

and while so engaged, the respondents violated the provisions of Section 4 d (2) 

of the Commodity Exchange Act in failing to account separately for the funds so 

received, by commingling said funds with the funds of the said Burke & Company 

and the funds of security customers of said Company, and by 

using the funds so received to margin and guarantee the trades and contracts of 

Hugh S. Gamble, and to extend credit to Hugh S. Gamble, and by failing to deal 

with money so received as belonging to said customers, but, in fact, using 

portions of said funds for the purpose of paying the personal obligations of the 

said Stephen A. Burke. 

It is further charged in the complaint that between January 1, 1938 and 

January 6, 1938, at Sioux Falls, South Dakota, the said Stephen A. Burke and 

Hugh S. Gamble did engage as futures commission merchants by and through said 

Burke & Company, after the Company's registration with the Secretary of 

Agriculture as such futures commission merchant under the Commodity Exchange Act 

had expired and without having reregistered pursuant to the provisions of said 

Act, all in violation of Section 4 d (1) of the Commodity Exchange Act. 
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No answer to the complaint was filed by either of the respondents and they 

did not appear in person or by attorney at the hearing held pursuant to the 

Secretary of Agriculture's notice of hearing before a referee at Washington, D. 

C. on August 17, 1938. At said hearing, proof of service of the complaint on 

respondents was received. Douglas B. Bagnell, in charge of the Division of 

Violations and Complaints, Commodity Exchange Administration, United States 

Department of Agriculture, testified that he examined the books and records of 

the respondents and thereafter made a report of his investigation; that the 

allegations contained in the complaint were true as shown by the examination by 

witness of the respondents' books and records. A duplicate original of Mr. 

Bagnell's report of investigation was received in evidence as Exhibit 4. It is 

considered that the proof supports the charges contained in the complaint. 

FINDINGS OF FACT 

The Secretary of Agriculture, having duly considered the evidence, now makes 

the following findings of fact: 

1. The Board of Trade of the City of Chicago was duly designated as a 

contract market under the Grain Futures Act on May 3, 1923, and it has been a 

contract market under said act and the Commodity Exchange Act continuously since 

that date. 

2. That between June 1, 1937 and December 31, 1937, at Sioux Falls, South 

Dakota, the respondents Hugh S. Gamble and Stephen A. Burke, acting by and 

through the means of Burke & Company, a corporation organized under the laws of 

the State of South Dakota, said Stephen A. Burke the president and Hugh S. 

Gamble, vice president of said corporation, did engage as futures commission 

merchants in soliciting and accepting orders for purchase and sale of 

commodities for future delivery, involving contracts of sale of such commodities 

for future delivery on or subject to 

the rules of the Board of Trade of the City of Chicago and, while so engaged, 

did accept orders from various persons for the purchase and sale of grain and 

other commodities as defined in the Commodity Exchange Act for future delivery 

and did receive funds from said persons to margin and guarantee the respective 

trades and contracts of said persons in such commodities and, at such times and 

places and while so engaged did violate the provisions of Section 4 d (2) of the 

Commodity Exchange Act as follows: 

A. The respondents failed to account separately for the funds so received in 

that on January 6, 1938, there were due commodity customers funds in excess of $ 

80,000 and funds segregated for the benefit of such customers amounted to only $ 

22,673.51, leaving a shortage of approximately $ 60,000 in the commodity 

customers' accounts, and the respondents did in fact commingle those said funds 

with the funds of the said Burke & Company and the funds of security customers 

of said Company. 

B. The respondents used the funds so received to margin and guarantee the 

trades and contracts of Hugh S. Gamble and to extend credit to Hugh S. Gamble in 

a sum in excess of $ 50,000, which said sum was taken by said Stephen A. Burke 

and Hugh S. Gamble, acting as aforesaid, out of the funds received by the said 

Burke & Company from various persons to margin and guarantee the respective 

trades and contracts of said persons in grain and other commodities as defined 

in the Commodity Exchange Act. 

C. The respondents failed to deal with the money so received as belonging to 

said customers, but did in fact, on the 9th day of June, 1937, draw and cause to 

be drawn a certain check numbered 2999, in the amount of $ 4500, payable to R. 

J. Weiland, and thereby extracted the said sum of $ 4500 from a certain account 

of the said Burke & Company in the First National Bank & Trust Company of Sioux 

Falls, South Dakota, designated "Customers' Margin Account Number 1", for the 

purpose of paying the personal obligation of the said Stephen A. Burke. 
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3. That the respondents Stephen A. Burke and Hugh S. Gamble, acting by and 

through the means of Burke & Company, a corporation organized under the laws of 

the State of South Dakota, did engage as futures commission merchants within the 

meaning of the Commodity Exchange Act after the said Burke & Company's 

registration with the Secretary of Agriculture as such futures commission 

merchants under the Commodity Exchange Act had expired and without having reregistered pursuant to the provisions of said act. 

CONCLUSIONS 

The record shows that respondents Hugh S. Gamble and Stephen A. Burke, while 

engaged as futures commission merchants, did violate Section 4 d (2) of the 

Commodity Exchange Act by failing to account separately for customers funds; by 

commingling customers' funds with the funds of 

Burke & Company, and the funds of security Customers and by using the funds of 

customers to margin and guarantee the trades and extend credit to third persons 

and that the said respondents also violated Section 4 d (1) of the Commodity 

Exchange Act by engaging as futures commission merchants while not registered 

pursuant to the provisions of said act. 

ORDER 

IT IS HEREBY ORDERED that all contract markets refuse all trading privileges 

thereon to Hugh S. Gamble and Stephen A. Burke until further notice of the 

Secretary of Agriculture. 

IT IS FURTHER ORDERED that a copy of these findings of fact, conclusions and 

order be transmitted by registered mail to the respondents and to the secretary 

of each contract market designated as such by the Secretary of Agriculture 

pursuant to the provisions of the Commodity Exchange Act. 

(SEAL) 

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

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

hereto, in the City of Washington, District of Columbia, this 20th day of 

September, 1938. 

(Signed) 

M. L. WILSON 

Acting Secretary of Agriculture 

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