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Commodity Futures Trading Commission 

CEA CASES 

NAME: MARTIN T. DYKE, MARTIN T. DYKE, III, AND DYKE & CO. 

DOCKET NUMBER: 168 

DATE: MARCH 3, 1970 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Martin T. Dyke, Martin T. Dyke, III, and Dyke & Co., Respondents 

CEA Docket No. 168 

Complaint and Notice of Hearing Under the Commodity Exchange Act 

There is reason to believe that the respondents have violated the Commodity 

Exchange Act (7 U.S.C., Chapter 1, 1964 ed., as amended, Supp. IV, 1969) and the 

regulations made pursuant thereto, and in accordance with the provisions of 

sections 6(b) and 6(c) of the said Act (7 U.S.C. 9 and 13b, Supp. IV, 1969), 

this complaint is issued stating the charges in that respect as follows: 

I 

Respondents Martin T. Dyke and Martin T. Dyke, III, individuals, are now, and 

were at all times material to this complaint, the sole partners in respondent 

Dyke & Co., a New York partnership with offices at 82 Wall Street, New York, New 

York 10005. At all times material herein up to August 28, 1969, the said 

partnership, acting in the capacity of futures commission merchant under the 

Commodity Exchange Act, was engaged in trading in commodities for future 

delivery for 

the accounts of customers. Throughout the year 1969, the said partnership was 

registered as futures commission merchant under the Commodity Exchange Act. In 

accordance with the provisions of section 4f of the said Act (7 U.S.C. 6f, Supp. 

IV, 1969) and section 1.16 of the regulations thereunder (17 CFR 1.16), such 

registration expired on December 31, 1969, and the said partnership is not now 

so registered. 

II 

At the times hereinafter stated, respondent Dyke & Co., in the regular course 

of the partnership business, had on its books accounts of customers who were 

trading in commodity futures on contract markets subject to the provisions of 

the Commodity Exchange Act. Such accounts, the trading therein, and the 

handling and disposition of funds in connection therewith, were subject to the 

provisions of the Commodity Exchange Act and the regulations issued thereunder. 

At all such times, respondent Dyke & Co. had to its credit with banks or other 

depositories sums of money in varying amounts, held in segregated accounts and 

identified as customers' funds, representing deposits of margin by and trading 

profits belonging to such customers. 

III 

On June 2, 1969, and between July 9 and August 19, 1969, both inclusive, 

respondent Dyke & Co. was undersegregated in amounts ranging from approximately 

$ 20,000 on June 2, 1969, to approximately 
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$ 93,000 on August 15, 1969, that is, the total amount of customers' funds held 

in segregation by the firm as described in paragraph II, was from approximately 

$ 20,000 to approximately $ 93,000 less than the amount necessary to pay all 

credits and equities due to such customers. 

IV 

(a) On each business day during the period from July 31, 1969, through August 

7, 1969, both inclusive, respondent Dyke & Co. prepared and kept a record 

purporting to show the amount required to be held in segregation, and the amount 

segregated, which record indicated that the respondent firm had excess funds in 

segregation, whereas, in truth and in fact, the said firm was undersegregated as 

specified in paragraph III. 

(b) As of August 15, 1969, respondent Dyke & Co. had failed to prepare and 

maintain a daily segregation record, as of the close of business on August 8, 

11, 12, 13, and 14, 1969, of the amount of money, securities, and property 

required to be held in segregation in order to pay all credits and equities due 

to its customers as provided in section 1.32 of the regulations issued under the 

Commodity Exchange Act (17 CFR 1.32). 

V 

On three occasions in 1967 and on two occasions in 1968, and prior to the 

acts and omissions described above, examination of the books and records of 

respondent Dyke & Co. by the Commodity Exchange 

Authority disclosed that the respondent firm was not properly preparing a daily 

permanent record of customers' funds required to be in segregation. The 

Commodity Exchange Authority called these matters to the respondents' attention 

and they assured the Commodity Exchange Authority that corrective measures would 

be taken so that the records of the respondent firm would comply with the 

provisions of the Commodity Exchange Act and the regulations thereunder. 

VI 

During the period from August 15, 1969, through August 28, 1969, both 

inclusive, while engaged as a registered futures commission merchant under the 

Commodity Exchange Act, respondent Dyke & Co. failed to meet the minimum 

financial requirements prescribed by section 1.17 of the regulations (34 F.R. 

599) issued by the Secretary of Agriculture under the said Act. Examination of 

the records of respondent Dyke & Co. by the Commodity Exchange Authority 

disclosed that as of August 15, 1969, the respondent firm had current 

liabilities which totalled $ 502,637.68 while its current assets totalled only $ 

260,276.65. 

VII 

By reason of the facts alleged in this complaint, the respondents wilfully 

violated sections 4d, 4f, and 4g of the Commodity Exchange Act (7 U.S.C. 6d, 6f, 

and 6g, Supp. IV, 1969), and sections 1.17, 

1.20, 1.21, 1.22, 1.23, 1.32 and 1.35 of the regulations thereunder (34 F.R. 

599, 17 CFR 1.20, 1.21, 1.22, 1.23, 1.32 and 1.35). 

WHEREFORE, it is hereby ordered that this complaint and notice of hearing be 

served upon the respondents and this proceeding shall be governed by sections 

0.1, 0.2, 0.4(b), 0.5 through 0.22 and 0.28 of the rules of practice under the 

Commodity Exchange Act (17 CFR 0.1, 0.2, 0.4(b), 0.5 through 0.22, 0.28). The 

respondents will have twenty (20) days after the receipt of this complaint in 

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

Washington, D. C. 20250, an answer with an original and four copies, fully and 

completely stating the nature of the defense and admitting or denying, 
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specifically and in detail, each allegation of this complaint. Allegations not 

answered will be deemed admitted for the purposes of this proceeding. Failure 

to file an answer will constitute an admission of all the allegations of this 

complaint and a waiver of hearing. The filing of an answer in which all of the 

material allegations of fact contained in the complaint are admitted likewise 

shall constitute a waiver of hearing unless a hearing is requested. The 

respondents are hereby notified that unless hearing is waived, a hearing will be 

held at 10:00 a.m., local time, on April 28, 1970, in New York, New York, at a 

place therein to be specified later, before a referee designated to conduct such 

hearing. At such hearing, the respondents will have the right to appear and 

show cause, if any there be, why an appropriate order should not be issued in 

accordance with the Commodity Exchange Act, (1) prohibiting the respondents from 

trading on or subject to the rules of any contract market, and directing that 

all contract markets refuse all trading privileges to the respondents for such 

period of time as may be determined and (2) directing that the respondents shall 

cease and desist from violating the Act and regulations in the manner alleged 

herein. 

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

respondents at least twenty (20) days prior to the date set for hearing. 

Done at Washington, D. C. 

March 3, 1970 

[SEE SIGNATURE IN ORIGINAL] 

Richard E. Lyng 

Assistant Secretary 

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