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Commodity Futures Trading Commission 

CEA CASES 

NAME: JAY W. KAUFMANN AND COMPANY, AND JAY W. KAUFMANN 

DOCKET NUMBER: STIPULATION 33 

DATE: JUNE 12, 1956 

DOCUMENT TYPE: STIPULATION OF COMPLIANCE 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Jay W. Kaufmann and Company, and Jay W. Kaufmann 

Stipulation of Compliance Under the Commodity Exchange Act No. 33 

WHEREAS, the Secretary of Agriculture has reason to believe that Jay W. 

Kaufmann and Company and Jay W. Kaufmann have violated the Commodity Exchange 

Act (7 U.S.C. 1952 ed. Chapter 1) and the rules and regulations made pursuant to 

its requirements (17 CFR, Chapter I, Part 1), by virtue of the transactions and 

matters hereinafter described, and 

WHEREAS, no complaint with respect to such violations has been issued, and 

WHEREAS, section 0.4(a) of the rules of practice under the Commodity Exchange 

Act (17 CFR 0.4(a)) provides that any time prior to the issuance of a complaint 

in any proceeding, the Secretary of Agriculture may, in his discretion, enter 

into a stipulation with a prospective respondent whereby the latter admits the 

material facts and agrees to discontinue the acts or practices which are 

intended to be set up as violative of the act, and 

WHEREAS, the said Jay W. Kaufmann and Company and Jay W. Kaufmann are 

desirous of disposing of this matter by entering into such a stipulation, 

NOW, THEREFORE, said Jay W. Kaufmann and Company and Jay W. Kaufmann hereby 

stipulate and represent that the following facts are true: 

1. Jay W. Kaufmann and Company is a New York partnership engaged in the stock 

and commodity brokerage business, and has its principal office and place of 

business at 111 Broadway, New York, New York. At all times material to this 

stipulation, the said Jay W. Kaufmann and Company was registered as a futures 

commission merchant under the Commodity Exchange Act, and in connection 

therewith it carried customers' accounts in regulated commodities and caused the 

execution of futures transactions in such commodities on the New York Mercantile 

Exchange through other registered futures commission merchants with whom it 

corresponded. 

2. At all times material to this stipulation the New York Mercantile Exchange 

was a duly designated contract market under the Commodity Exchange Act. 

3. Jay W. Kaufmann, an individual, is now and was at all times material to 

this stipulation the senior partner in Jay W. Kaufmann and Company, and at all 

such times said Jay W. Kaufmann exercised supervision and control of the 

business of said Jay W. Kaufmann and Company. 

4. Section 4d(2) of the Commodity Exchange Act (7 U.S.C. 1952 ed. § 6d(2)) 

and the rules and regulations promulgated thereunder (17 CFR 1.20, 1.21, 1.22, 

1.23, 1.24) require a futures commission merchant to treat and deal with all 

money received to margin, guarantee, or secure the trades or contracts of 

customers, or accruing to customers as the result of such trades or contracts, 

as belonging to such customers, and prohibits the commingling of such money with 
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the funds of the futures commission merchant or the use thereof to guarantee the 

trades or contracts, or to secure or extend the credit, of any customer or 

person other than the one for whom such money is held. 

During 1954 and 1955, said Jay W. Kaufmann and Company was carrying accounts 

for customers who were trading in commodity futures subject to the Commodity 

Exchange Act and regulations, and had on deposit with clearing brokers varying 

sums of money held in segregated accounts, representing margin deposits and 

trading profits belonging to such customers. At all times between August 31 and 

September 15, 1954, both inclusive, and on September 21, 1954 said Jay W. 

Kaufmann and Company was under-segregated in amounts ranging from approximately 

$ 250 to approximately $ 800 - that is, the total amount of customers' funds 

held in segregation as above described was approximately $ 250 to approximately 

$ 800 less than the amount necessary to pay all sums owing to such customers. 

On or about January 4, May 27, June 28, October 18, October 20, October 26, and 

November 2, 1955, said Jay W. Kaufmann and Company received and accepted funds 

representing margin deposits by customers or 

profits accruing to them as a result of trades, and deposited such funds in the 

general bank account of said firm. 

5. On each day from August 18 to September 28, 1954, from December 29 to 

December 31, 1954, and from November 30 to December 30, 1955, said Jay W. 

Kaufmann and Company failed to compute and its books and records failed to show 

the amount of money, securities, and property required to be held in 

segregation, as required by section 1.32 of the regulations under the Commodity 

Exchange Act (17 CFR 1.32). 

6. On October 21, October 26, November 15, November 17, November 23, December 

6, and December 12, 1955, said Jay W. Kaufmann and Company caused the execution 

of transactions in potato futures on the New York Mercantile Exchange for the 

accounts of customers, failed to apply such transactions on the same days as 

they were made against open contract positions in such futures held by such 

customers, and failed promptly to furnish to such customers purchase and sale 

statements showing the financial results of such transactions, as required by 

section 1.46 of the regulations under the Commodity Exchange Act (17 CFR 1.46). 

In addition to admitting the aforementioned facts, said Jay W. Kaufmann and 

Company and Jay W. Kaufmann hereby agree to discontinue all such acts and 

practices and to refrain from all other acts and 

practices which are in violation of the Commodity Exchange Act or the rules and 

regulations thereunder, and further specifically agree that this stipulation 

shall be admissible as evidence of acts and practices in violation of the 

Commodity Exchange Act and the rules and regulations thereunder in any 

subsequent proceeding which may be brought against said Jay W. Kaufmann and 

Company and Jay W. Kaufmann, or either of them, under the provisions of said 

act. 

Done at New York, New York 

this 12th day of June, 1956. 

/s/ Jay W. Kaufmann & Co. 

Jay W. Kaufmann and Company 

By /s/ Jay W. Kaufmann 

/s/ Jay W. Kaufmann 

Jay W. Kaufmann 

Witnessed by: 
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/s/ Bennett Frankel 

/s/ Charles E. Robinson 

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