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Commodity Futures Trading Commission 

CEA CASES 

NAME: DEAN WITTER & CO., INCORPORATED 

DOCKET NUMBER: 178 

DATE: AUGUST 20, 1971 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Dean Witter & Co., Incorporated, Respondent 

CEA Docket No. 178 

Complaint and Notice of Hearing Under the Commodity Exchange Act 

There is reason to believe that the respondent has violated the Commodity 

Exchange Act (7 U.S.C. 1 et seq.) and the regulations made pursuant thereto, and 

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

respect as follows: 

I 

Respondent, Dean Witter & Co., Incorporated, a Delaware Corporation with 

offices at 45 Montgomery Street, San Francisco, California 94104, is now, and 

was at all times material herein, a registered futures commission merchant under 

the Commodity Exchange Act and so engaged in business. 

II 

(a) At the times hereinafter stated, respondent Dean Witter & Co., 

Incorporated, in the regular course of its business as futures commission 

merchant, carried accounts of customers who traded in commodity futures on 

contract markets subject to the provisions of the Commodity Exchange Act and the 

regulations thereunder. 

Such accounts, the trading therein, and the handling and disposition of funds in 

connection therewith, were subject to the provisions of the said act and 

regulations. At all such times, the respondent corporation had to its credit 

with banks or other depositories, money and securities in varying amounts, held 

in segregated accounts and identified as customers' funds, representing deposits 

of margin by and trading profits accruing to such customers. 

(b) During the period between June 5 and June 11, 1970, both inclusive, the 

respondent corporation was continuously under-segregated in amounts ranging from 

$ 137,014 on June 10, 1970, to $ 260,134 on June 11, 1970, that is, throughout 

the period mentioned the total amount of customers' funds held in segregation as 

above described, was from $ 137,014 to $ 260,134 less than the amount necessary 

to pay all credits and equities due to such customers. 

(c) Under the regulations issued pursuant to the Commodity Exchange Act the 

respondent corporation was obligated at all times material herein to prepare and 

maintain a daily computation and record setting forth the amount of money, 

securities and property of its customers required to be held, and held, in 

segregated accounts in accordance with the requirements of section 4d(2) of the 

Commodity Exchange Act (7 U.S.C. 6d(2)). On numerous days during the period 

between August 13 and December 31, 1970, both inclusive, the daily computation 

and record that was prepared and 
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kept by the respondent corporation to meet the requirements of the regulations 

contained errors which resulted in gross misstatements of the amount of 

customers' money, securities and property held in segregation. 

III 

Examination of the records of respondent Dean Witter & Co., Incorporated, by 

the Commodity Exchange Authority as of November 30, 1968, and examinations of 

the records of Dean Witter & Co., the respondent corporation's predecessor 

partnership, as of March 31, 1966 and February 27, 1967, disclosed that the 

corporation and its predecessor partnership had not satisfactorily complied with 

the requirements of the Commodity Exchange Act and the regulations thereunder 

relating to the handling of customers' funds and to the preparation and 

maintenance of records in connection thereto. These matters were called to the 

attention of the corporation and to its predecessor partnership in writing by T. 

Reed McMinn, Director of the Commodity Exchange Authority's Eastern Region, on 

July 18, 1966, May 2, 1967 and April 24, 1969. 

IV 

By reason of the facts alleged in this complaint, respondent Dean Witter & 

Co., Incorporated, willfully violated sections 4d(2) and 4g of the Commodity 

Exchange Act (7 U.S.C. 6d(2), 6g), and sections 1.20, 1.21, 1.22, 1.23, 1.32 and 

1.35 of the regulations thereunder (17 CFR 1.20, 1.21, 1.22, 1.23, 1.32, 1.35). 

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

served upon the respondent 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 

respondent 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 three 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 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 

respondent is hereby notified that unless hearing is waived, a hearing will be 

held at 10:00 a.m., local time, on October 13, 1971, in San Francisco, 

California, at a place therein to be specified later, before a referee 

designated to conduct such hearing. At such hearing, the respondent 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) suspending or revoking the registration of the respondent as futures 

commission merchant, (2) prohibiting the respondent from trading on or subject 

to the rules of any contract market, and directing that all contract markets 

refuse all trading privileges to the respondent for such period of time as may 

be determined and (3) directing that the respondent 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 

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

Done at Washington, D. C. 

August 20, 1971 

[SEE SIGNATURE IN ORIGINAL] 

Richard E. Lyng 
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Assistant Secretary 

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