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Commodity Futures Trading Commission 

CEA CASES 

NAME: JOSEPH A. FRIEDMAN AND JOSEPH A. FRIEDMAN CO. 

DOCKET NUMBER: 115 

DATE: DECEMBER 17, 1963 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re Joseph A. Friedman and Joseph A. Friedman Co., Respondents 

CEA Docket No. 115 

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

Act 

There is reason to believe that the respondents, Joseph A. Friedman and 

Joseph A. Friedman Co., have violated the Commodity Exchange Act (7 U.S.C. § 1 

et seq.), hereinafter referred to as the Act, and the rules and regulations made 

pursuant thereto (17 CFR, Part 1), hereinafter referred to as the regulations, 

and in accordance with the provisions of section 6(b) of the Act (7 U.S.C. § 9), 

this complaint and notice of hearing is issued stating the charges in that 

respect as follows: 

I 

Respondent Joseph A. Friedman, an individual, whose business address is 6 

Harrison Street, New York, New York, is now and was at all times material to 

this complaint a member of the New York Mercantile Exchange and a registered 

floor broker under the Act. 

II 

Respondent Joseph A. Friedman Co., a partnership composed of respondent 

Joseph A. Friedman and his wife, whose business address is 6 Harrison Street, 

New York, New York, is now and was at all times material to this complaint a 

clearing member of the New York Mercantile Exchange and a registered futures 

commission merchant under the Act. 

III 

The New York Mercantile Exchange was at all times material to this complaint 

and is now a duly designated contract market under the Act. 

IV 

The transactions referred to in this complaint relate to the purchase and 

sale of May 1963 potato futures contracts on the New York Mercantile Exchange. 

Such contracts could have been used for hedging transactions in interstate 

commerce in potatoes or the products or byproducts thereof, or for determining 

the price basis of transactions in interstate commerce in potatoes, or for 

delivering potatoes sold, shipped, or received in interstate commerce. 

V 

Respondents, in filling orders received from Shearson, Hammill & Co. and from 

D. R. Comenzo & Co., Inc., registered futures commission merchants under the 

Act, made the following trades in May 1963 potato futures on the New York 

Mercantile Exchange: 
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See original document-page 2 

Trades Made by Respondents for Shearson, Hammill & Co. Date and D. R. Comenzo & Co., Inc. Opposite Side of 

1963 the Trade 

Clearing Floor Floor Clearing 

Quantity Price Member Broker Broker Member and 

(carlots) (Dollars Account 

Bought Sold per cwt.) 

January 18 1 2.56 Shearson, Joseph A. D.Laiken Joseph A. 

Hammill & Co. Friedman Friedman 

Co. 

18 1 2.58 " H. Fisher Joseph A. " 

Friedman 

23 2 2.71 " R. Leeds " " 

 24 4 2.87 " R. Leeds " " 

 

25 2 2.81 " Joseph A. Max " 

Friedman Friedman 

25 1 2.81 " " " " 25 2 2.79 " R. Leeds Joseph A. " 

Friedman 

25 5 2.80 " Max " Friedman " 

28 5 2.83 " Joseph A. Max " 

Friedman Friedman 

29 1 2.78 " I. Freund- Joseph A. " 

lich Friedman 

31 3 2.92 D. R. Joseph A. Max " 

Comenzo & Friedman Friedman 

Co., Inc. February 

8 2 2.88 Shearson, Joseph A. " " 

Hammill & Co. Friedman 15 1 2.89 D. R. Comenzo " " " 

& Co., Inc. 

18 1 2.97 Shearson, N. Faye Joseph A. " 

Hammill & Co. Friedman 

20 1 2.89 D.R. Comenzo Joseph A. D. Laiken " 

& Co., Inc. Friedman 21 1 2.94 Shearson, D. Laiken Joseph A. " 

Hammill & Co. Friedman 

25 1 2.83 " Joseph A. H. Fisher " 

Friedman 

27 1 2.75 " D. Joseph A. " 

Weinberger Friedman 

27 1 2.76 " " " " 

 

In the transactions set forth above respondents willfully and knowingly and 

without the prior consent of their principals filled orders received from such 

principals by taking the opposite side thereof for respondents' own account in 

violation of section 4(b)(D) of the Act (7 U.S.C. 6b(D). 

VI 

On January 25, 1963, respondents received for execution three orders to 

purchase at the market a total of 14 carlots of May 1963 potato futures on 

behalf of customers of Shearson, Hammill & Co. Thereafter, on January 25, 1963, 

respondents purchased 10 carlots of such futures at $ 2.80 per hundred pounds, 
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and took these purchases into their own account, notwithstanding that at such 

time respondents had in their possession for execution the said market orders of 

Shearson, Hammill & Co. Later, on the same day, respondents purchased 14 carlots 

of May 1963 potato futures at $ 2.82 per hundred pounds, and allocated these 

purchases to fill the said market orders of Shearson, Hammill & Co. By reason 

thereof, respondents, in connection with orders to make, and the making of 

contracts for future delivery on behalf of persons, attempted to cheat and 

defraud, and in fact did cheat and defraud such persons in violation of section 

4b(A) of the Act (7 U.S.C. 6b(A)). 

VII 

On January 25, 1963, respondents received for execution an order to sell two 

carlots of May 1963 potato futures for the account of Shearson, 

Hammill & Co. Respondents noncompetitively filled such order with two carlots 

of May 1963 potato futures which respondents had previously purchased for their 

own account. By reason thereof, respondents failed to execute futures trades 

openly and competitively by open outcry on the trading floor of the New York 

Mercantile Exchange in willful violation of section 1.38 of the regulations (17 

CFR 1.38). 

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

served upon the said respondents. 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 five copies, fully and completely stating the nature of the 

defense and admitting or denying, specifically and in detail, each allegation of 

this complaint. Allegations not answered will be deemed admitted for the 

purpose 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 

respondents are hereby notified that unless hearing is waived, either expressly 

or by failure to file an answer, or by filing an answer in which all of the 

material allegations of fact contained in the complaint are admitted and a 

hearing is not requested, a hearing will be held at 10:00 a.m., local time, on 

the 19th day of February 1964, 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 order should not be made suspending or revoking the 

registration of respondent Joseph A. Friedman as floor broker, suspending or 

revoking the registration of Joseph A. Friedman Co. as futures commission 

merchant, and directing that all contract markets refuse all trading privileges 

to each respondent for such period of time as may be determined. 

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. 

December 17, 1963 

George L. Mehren 

Assistant Secretary 

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