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Commodity Futures Trading Commission 

CEA CASES 

NAME: LANDON V. BUTLER, BLACK GIN COMPANY, BUTLER-FOSTER MILLING COMPANY, AND 

ALABAMA GRAIN ELEVATOR COMPANY 

DOCKET NUMBER: 65 

DATE: FEBRUARY 4, 1955 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Landon V. Butler, Black Gin Company, Butler-Foster Milling Company, 

and Alabama Grain Elevator Company, Respondents 

CEA Docket No. 65 

Complaint and Notice of Hearing Under Section 6(b) of the Commodity Exchange 

Act 

The Assistant Secretary of Agriculture has reason to believe that the 

respondents, Landon V. Butler, Black Gin Company, Butler-Foster Milling Company, 

and Alabama Grain Elevator Company, attempted to manipulate the price of a 

commodity in interstate commerce and for future delivery on or subject to the 

rules of a board of trade, and knowingly delivered or caused to be delivered for 

transmission in interstate commerce, false, misleading, or knowingly inaccurate 

reports concerning market information or conditions that tended to affect the 

price of a commodity in interstate commerce, in violation of the Commodity 

Exchange Act (7 U.S.C., Chapter 1). In accordance with the provisions of 

section 6(b) of the Commodity Exchange Act (7 U.S.C. 9), this complaint and 

notice of hearing is issued alleging as follows: 

I 

Respondent Landon V. Butler, an individual whose address is 60 South Front 

Street, Memphis, Tennessee, is now and was at all times material herein a trader 

in commodity futures and engaged in various business enterprises through 

respondents Black Gin Company, Butler-Foster Milling Company, and Alabama Grain 

Elevator Company, more particularly described hereinafter. At all such times 

the said Landon V. Butler was also a partner in F. M. Crump and Company, 

Memphis, Tennessee, a registered futures commission merchant under the Commodity 

Exchange Act. Respondent Landon V. Butler and the said Crump and Company were 

at all such times members of the Board of Trade of the City of Chicago. 

II 

Respondent Black Gin Company, a Missouri corporation, is engaged in the 

business of ginning and merchandising cotton and trading in commodity futures. 

Respondent Butler-Foster Milling Company, a Missouri corporation, and respondent 

Alabama Grain Elevator Company, a corporation operating in Alabama, are engaged 

in the business of milling and merchandising grain and trading in commodity 

futures. Each of the said corporations maintains an 

office at 60 South Front Street, Memphis, Tennessee, and respondent Landon V. 

Butler is the president and managing officer of each of such corporations. All 

of the stock in respondents Black Gin Company and Butler-Foster Milling Company 

is held, in equal amounts, by respondent Landon V. Butler, Sydney J. Butler, his 

wife, not a respondent herein, and Robert Foster and his wife, not respondents 
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herein. Respondent Landon V. Butler is also a substantial stockholder in 

respondent Alabama Grain Elevator Company. 

III 

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

Board of Trade, was at all times material herein a duly designated contract 

market under the Commodity Exchange Act. 

IV 

During the calendar year 1954, respondent Landon V. Butler and each of the 

corporate respondents had commodity trading accounts with F. M. Crump and 

Company, and the said F. M. Crump and Company also carried commodity trading 

accounts for certain other persons and firms, hereinafter called Crump accounts 

or Crump customers, including the following: 

Allen-Davis Company 

Sydney J. Butler 

Dabney Crump 

Robert Foster 

Hunter S. George 

Walter Regnery 

Frank Crump 

Jackson Davis 

Virginia Emmert 

Rodgers, Fay & Brown 

Alexander Sprunt & Son, Inc. 

J. K. Willey 

V 

During the period from January 1, 1954 through November 30, 1954, respondent 

Landon V. Butler, acting for himself or on behalf of the corporate respondents, 

traded actively and extensively in soybeans and soybean futures contracts on the 

Chicago Board of Trade, and during this period there was also active trading in 

the Crump accounts. In the course of such trading the respondents and the Crump 

customers purchased and sold substantial quantities of March, May, July, and 

September 1954 soybean futures, established large long positions in each of the 

said futures, stood for delivery thereon, received large quantities of 

deliverable cash soybeans in satisfaction thereof, and purchased and received, 

and entered into contracts to purchase and receive, additional large quantities 

of cash soybeans in store in Chicago grain elevators and available for delivery 

in satisfaction of such futures contracts. In connection with such trading, 

respondent Landon V. Butler purchased and received from various Crump customers, 

and the said customers sold and delivered to respondent Landon V. Butler, large 

quantities of deliverable cash soybeans which such customers had received in 

satisfaction of soybean futures contracts 

which they held. As a result of such trading activities, the combined futures 

and cash holdings of the respondents and the Crump customers represented a 

substantial portion of the deliverable stocks of soybeans in Chicago during most 

of 1954. These holdings were approximately 21 percent on the last day of 

trading in the March 1954 future, approximately 46 percent on the last day of 

trading in the May 1954 future, and approximately 94 percent on the last day of 

trading in the July 1954 future. 
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VI 

During the period from January 1, 1954 through November 30, 1954, and as part 

of and in connection with the activities described in paragraph V, respondent 

Landon V. Butler, acting for himself or on behalf of the corporate respondents: 

(a) sold and entered into contracts to sell large quantities of deliverable 

soybeans under terms and conditions which made them unavailable for delivery in 

satisfaction of soybean futures contracts on the Chicago Board of Trade; 

(b) withheld deliverable cash soybeans from sale except under terms and 

conditions which made them unavailable for delivery in satisfaction of soybean 

futures contracts on the Chicago Board of Trade; 

(c) shipped large quantities of deliverable soybeans out of Chicago under 

conditions which made these shipments economically 

unjustified, in order to make such soybeans unavailable for delivery in 

satisfaction of soybean futures contracts on the Chicago Board of Trade; and 

(d) entered into purported contracts for the purchase and sale of cash 

soybeans, or for the exchange of cash soybeans, which were not bona fide cash 

contracts but which, in effect, constituted transactions in futures under which 

respondent Landon V. Butler was able to control additional large quantities of 

soybean futures and determine the disposition thereof. 

VII 

On or about March 12, 1954, May 24, 1954, and July 15, 1954, respondent 

Landon V. Butler transmitted in interstate commerce to members of the grain 

trade and other interested persons, information purporting to relate to 

impending large shipments of deliverable cash soybeans from Chicago. Such 

information was false, misleading, or knowingly inaccurate, and was transmitted 

by the said respondent with knowledge of the fact that it would be widely 

circulated or disseminated, and for the purpose and with the intent of causing a 

price movement in the soybean market. 

VIII 

On or about August 13, 1954, respondent Landon V. Butler transmitted in 

interstate commerce to the United States Department of 

Agriculture and the Chicago Board of Trade, reports that a Chicago grain 

elevator containing large quantities of deliverable soybeans against which 

negotiable warehouse receipts had been issued was unable to comply with loading 

out orders given by the holder of such receipts. At the same time, the said 

respondent published or caused the publication of similar representations or 

information among members of the grain trade and other interested persons. Such 

information, reports, and representations were false, misleading, or knowingly 

inaccurate in that they were designed to indicate that such grain elevator did 

not have in its possession and could not deliver soybeans of the quality and in 

the quantity called for by such receipts, which was contrary to fact. 

Respondent Landon V. Butler transmitted such reports and published or caused the 

publication of such information with knowledge of the fact that such reports and 

information would be widely circulated or disseminated, and for the purpose and 

with the intent of causing a price movement in the soybean market. 

IX 

On or about May 19, 1954, near the termination of trading in the May 1954 

soybean futures contract, Jackson Davis, a Crump customer, ordered a floor 

broker on the Chicago Board of Trade to purchase 
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625,000 bushels of May 1954 soybean futures. The said Jackson Davis gave the 

order at a time and under circumstances designed to cause an increase in the 

price of soybean futures, and for that purpose and with that intent, and as a 

result of such order the price of May 1954 soybean futures was increased 

substantially by rapid and successive bids on an ascending scale made on the 

floor of the Chicago Board of Trade by brokers attempting to execute the said 

order. The resulting purchases of 125,000 bushels of May 1954 soybean futures 

were allocated and distributed among the accounts of various Crump customers, 

including accounts influenced or controlled by respondent Landon V. Butler. 

X 

Respondent Landon V. Butler, in his capacity as president and managing 

officer of the respondent corporations, initiated, supervised, directed and 

controlled the above described corporate transactions and was responsible for 

their execution. The said respondent also advised with respect to and 

influenced the trading in the Crump accounts, and the above described 

transactions by the Crump customers were undertaken and carried out pursuant to 

his recommendations and guidance. Respondent Landon V. Butler and the corporate 

respondents 

acted for the purpose and with the intent of manipulating the price of 

deliverable cash soybeans in Chicago and soybean futures on the Chicago Board of 

Trade, in order to enable them to realize larger profits on their cash and 

futures holdings. 

XI 

By reason of the acts and transactions described in paragraphs V to X, both 

inclusive, respondent Landon V. Butler and the corporate respondents attempted 

to manipulate the price of soybeans in interstate commerce and for future 

delivery on or subject to the rules of a board of trade, in wilful violation of 

sections 6(b) and 9 of the Commodity Exchange Act (7 U.S.C. 9, 13). 

XII 

By reason of the acts and transactions described in paragraphs VII and VIII, 

respondent Landon V. Butler and the corporate respondents knowingly delivered or 

caused to be delivered for transmission in interstate commerce, false, 

misleading, or knowingly inaccurate reports concerning market information or 

conditions which tended to affect the price of soybeans in interstate commerce, 

in wilful violation of section 9 of the Commodity Exchange Act (7 U.S.C. 13). 

Therefore, the said respondents, Landon V. Butler, Black Gin Company, ButlerFoster Milling Company, and Alabama Grain Elevator Company, are hereby notified 

to be and appear at a hearing to be held at 10:00 a.m., Central Standard Time, 

on the 30th day of March, 1955, in Room 1200, Board of Trade Building, 141 West 

Jackson Boulevard, 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 

all the respondents for such period of time as may be determined. 

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

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

Agriculture, Washington 25, D. C., an answer with an original and five 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 
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employee of the Department of Agriculture, or by registered mail, at least 20 

days prior to the date set for hearing. 

Done at Washington, D. C. 

this 4th day of Feb., 1955. 

/s/ Earl L. Butz 

Assistant Secretary of Agriculture 

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