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Commodity Futures Trading Commission 

CEA CASES 

NAME: CHARLES HAAG 

CITATION: 23 Agric. Dec. 517 

DOCKET NUMBER: 116 

DATE: MAY 11, 1964 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 9079) 

In re CHARLES HAAG. CEA Docket No. 116. Decided May 11, 1964. 

Trading Limits -- Reports -- Denial of Trading Privileges -- Default

All contract markets are directed to refuse trading privileges to respondent 

for a period of 6 months for exceeding trading and position limits in egg 

futures and for falsification of reports and failure to file required reports. 

Mr. Earl L. Saunders, for Commodity Exchange Authority. Mr. Benj. M. Holstein,

Hearing Examiner. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is a proceeding under the Commodity Exchange Act (7 U.S.C. Chapter 1), 

in which the respondent, a trader in commodity futures, is charged with failure 

to submit required reports concerning transactions in egg futures and soybean 

futures and with submitting false reports concerning transactions in egg 

futures, in violation of section 4i of the act (7 U.S.C. 6i) and the applicable 

regulations thereunder and with exceeding the 

maximum speculative trading and position limits in violation of section 4a of 

the act (7 U.S.C. 6a) and the order of the Commodity Exchange Commission (17 CFR 

150.5). A copy of the complaint and a copy of the rules of practice were served 

upon the respondent February 12, 1964. 

At the time of service of the complaint, respondent was notified in writing 

that an answer to the complaint should be filed within 20 days of its receipt 

and that, in accordance with the rules of practice, failure to answer would 

constitute an admission of the facts alleged and failure to request a hearing 

would constitute a waiver of hearing. The respondent has not filed an answer 

nor has he requested a hearing. The matter was referred to Benj. M. Holstein, 

Hearing Examiner, Office of Hearing Examiners, United States Department of 

Agriculture, for the preparation of a report without further investigation or 

hearing pursuant to section 0.9 (c) of the rules of practice (17 CFR 0.9(c)). 

On April 8, 1964, the hearing examiner filed a report recommending that the 

respondent be found to have violated the act as charged and that an order be 

issued directing all contract markets to refuse all trading privileges to 

respondent for a period of 6 months. No exceptions to the hearing examiner's 

report were filed. 

FINDINGS OF FACT

1. Respondent, Charles Haag, is an individual whose address is 24 Brookside 

Drive, Upper Saddle River, New Jersey. 
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2. The Board of Trade of the City of Chicago, hereinafter referred to as the 

Chicago Board of Trade, and the Chicago Mercantile Exchange are now and were at 

all times material herein duly designated contract markets under the act. 

3. During the period October 18, 1962, through January 15, 1963, the 

respondent made trades in egg futures on the Chicago Mercantile Exchange in his 

own accounts, carried in his name and in the name of Aaron G. Brandfon, and in 

accounts of 19 other persons, which accounts were controlled by the respondent. 

All transactions in such accounts belonged to or were controlled by respondent. 

4. On each business day during the periods October 18 through October 24, 

1962, October 26 through October 28, 1962, October 30 through November 7, 1962, 

November 9 through December 26, 1962, and January 7 through January 14, 1963, 

the respondent 

held or controlled a net short position in shell egg futures on the Chicago 

Mercantile Exchange, which position ranged from 25 carlots to 134 carlots in a 

single future. By reason of the fact that such quantities were equal to or in 

excess of 25 carlots, the respondent was in reporting status and was required to 

report to the Commodity Exchange Authority with respect to all transactions 

executed and all open contract positions held or controlled by him in all egg 

futures on all boards of trade during such periods and with respect to all 

transactions by reason of which the respondent no longer held or controlled a 

reportable position. 

5. On 31 business days within the periods specified in Finding of Fact 4 

above, while the respondent was in reporting status as therein described, and on 

five additional business days, that is, on October 25 and 29, 1962, November 8, 

1962, December 27, 1962, and January 15, 1963, when the respondent's position 

was reduced below the reporting level, transactions in shell egg futures on the 

Chicago Mercantile Exchange were executed for accounts owned or controlled by 

respondent. However, respondent failed or refused to submit reports to the 

Commodity Exchange Authority on 28 of such days and submitted false reports with 

respect to the remaining 8 days. 

6. On the dates listed below, respondent made speculative trades in shell egg 

futures on the Chicago Mercantile Exchange which were in excess of the maximum 

permissible limits established by the order of the Commodity Exchange Commission 

(17 CFR 150.5) as follows: 

No. of Carlots 

Date Future Purchased Sold

November 9, 1962 December 1962 76

December 21, 1962 December 1962 129 January 7, 1963 January 1963 94

January 15, 1963 January 1963 100 

7. On the dates listed below, the respondent held or controlled speculative 

net short positions in shell egg futures on the Chicago Mercantile Exchange 

which were in excess of the maximum permissible limits established by the order 

of the Commodity Exchange Commission (17 CFR 150.5) as follows: 

See original document-page 3 

Position 

Date Future (No. of Carlots)

October 30, 1962 November 1962 82

November 1 " 82

9 December 1962 86

13 " 87

14 " 102

20 " 87

23 " 104

26 " 109

28 " 84

30 " 94
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 Position 

Date Future (No. of Carlots)

December 3 " 109

4 " 129

6 " 134

11 " 134

12 " 134

13 " 134

14 " 134

17 " 114

18 " 109

20 " 129

January 7, 1963 January 1963 98

8 " 98

10 " 98

14 " 104

8. On December 20, 1962, respondent held or controlled a speculative net 

short position of 154 carlots in all shell egg futures combined on the Chicago 

Mercantile Exchange which position was in excess of the maximum permissible 

limit established by the order of the Commodity Exchange Commission (17 CFR 

150.5). 

9. On each business day during the period January 25 through February 5, 

1963, the position in soybean futures on the Chicago Board of Trade in accounts 

owned or controlled by the respondent exceeded 200,000 bushels in a single 

future and, therefore, the respondent was in reporting status and was required 

to report to the Commodity Exchange Authority with respect to all transactions 

executed and all open contract positions held during such period for all 

accounts owned or controlled by him, in all soybean futures on all boards of 

trade, and with respect to all transactions by reason of which respondent no 

longer held or controlled a reportable position. 

10. On six business days during the period referred to in Finding of Fact 9 

above, that is, on January 25, 28, 29, 30, 31 and 

February 1, 1963, while the respondent was in reporting status as therein 

described, and on one additional business day, February 6, 1963, when the 

respondent's position was reduced below the reporting level, transactions in 

soybean futures on the Chicago Board of Trade were executed for accounts owned 

or controlled by him, but respondent failed or refused to report with respect to 

such transactions and the resulting positions to the Commodity Exchange 

Authority. 

CONCLUSIONS

Section 4i of the act (7 U.S.C. 6i) requires every person who trades in 

futures to submit reports with respect to such trading "whenever such person 

shall directly or indirectly have or obtain a long or short position in any 

commodity or in any future of such commodity, equal to or in excess of such 

amount as shall be fixed from time to time by the Secretary of Agriculture." The 

quantity fixed by the Secretary for reporting purposes under the above provision 

is 25 carlots in any one egg future, and 200,000 bushels in any one grain future 

(17 CFR 15.03). The facts set forth in Findings of Fact 4, 5, 9 and 10 

demonstrate that on numerous occasions the respondent failed or refused to file 

required reports with respect to his trading and positions in egg and soybean 

futures and filed false reports with respect to his trading and positions in egg 

futures, in violation of section 4i of the act, and sections 15.01, 15.02, 

15.03, 18.00, 18.01 and 18.03 of the regulations issued by the Secretary (17 CFR 

15.01, 15.02, 15.03, 18.00, 18.01 and 18.03). 

Section 4a of the act (7 U.S.C. 6a) empowers the Commodity Exchange 

Commission to fix such limits on the amount of trading in futures which may be 

done by any person "as the Commission finds is necessary to diminish, eliminate, 
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or prevent" burdens on interstate commerce caused by excessive speculation. 

Pursuant to such authority, the Commission has fixed maximum limits on the daily 

amount of speculative trading in egg futures which any person may do and also on 

the speculative position which any person may hold (17 CFR 150.5). The daily 

trading limit for the December future is 50 carlots of purchases and 50 carlots 

of sales on any one contract market, and the same daily trading limits apply to 

the January future. With respect to position limits, no trader may hold or 

control a speculative net long or net short position on any one contract market 

in excess of 150 carlots in all egg futures, nor may such position exceed 75 

carlots in the 

November future, 50 carlots in the December future, or 50 carlots in the January 

future. The facts set forth in Findings of Fact 6, 7 and 8 show that 

respondent's daily trading and positions exceeded these limits on many 

occasions. He thereby violated section 4a of the act and section 150.5 of the 

regulations. 

Falsification of reports, failure or refusal to file required reports and 

trading in excess of permissible limits are serious violations. See In re 

Benedict K. Goodman, 18 Agric. Dec. 1121 (18 A.D. 1121) (1959), affirmed, 

Goodman v. Benson, 286 F.2d 896 (7th Cir. 1961); In re Milrose Foods Co. et al.,

14 Agric. Dec. 1037 (14 A.D. 1037) (1955). The large number of such infractions 

by respondent and the substantial amounts involved indicate that his acts were 

of a deliberate, flagrant and willful nature. It is concluded that all contract 

markets should be directed to refuse all trading privileges to respondent for a 

period of 6 months, such refusal to apply to all trading done and positions held 

by respondent, directly or indirectly, as recommended by complainant. 

ORDER

Effective June 15, 1964, all contract markets shall refuse all trading 

privileges to the respondent, Charles Haag, for a period of 6 months, such 

refusal to apply to all trading done and positions held by the respondent, 

directly or indirectly. 

A copy of this decision and order shall be served upon the respondent and 

upon each contract market. 

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