Page 1 

Commodity Futures Trading Commission 

CEA CASES 

NAME: JULIAN M. MARKS, STUART A. NEWMAN, MARSHALL K. SMITH, IRWIN M. EISEN, AND 

JAMES S. SCHONBERG 

DOCKET NUMBER: 98 

DATE: JANUARY 13, 1961 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Julian M. Marks, Stuart A. Newman, Marshall K. Smith, Irwin M. Eisen, and 

James S. Schonberg, Respondents 

CEA Docket No. 98 

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

Act 

There is reason to believe that the respondents, Julian M. Marks, Stuart A. 

Newman, Marshall K. Smith, Irwin M. Eisen, and James S. Schonberg, have violated 

the Commodity Exchange Act (7 U.S.C. 1958 ed., Chapter 1), hereinafter called 

the act, and the regulations made pursuant thereto, and in accordance with the 

provisions of section 6(b) of the said act (7 U.S.C. 1958 ed., § 9), this 

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

follows: 

I 

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

Board of Trade, is now and was at all times material to this complaint a duly 

designated contract market under the act. 

II 

Respondent Julian M. Marks, an individual whose address is Care of Trading 

Floor, Chicago Board of Trade, 141 West Jackson Boulevard, Chicago 4, Illinois, 

is now and was at all times material to this complaint a registered floor broker 

under the act and a member of the Chicago Board of Trade. 

III 

Respondent Stuart A. Newman, an individual whose address is 945 Longaker 

Road, Northbrook, Illinois, was at all times material to this complaint a 

registered floor broker under the act and is now and was at all such times a 

member of the Chicago Board of Trade. 

IV 

Respondent Marshall K. Smith, an individual whose address is Care of Trading 

Floor, Chicago Board of Trade, 141 West Jackson Boulevard, Chicago 4, Illinois, 

is now and was at all times material to this complaint a registered floor broker 

under the act and a member of the Chicago Board of Trade. 

V 

Respondent Irwin M. Eisen, an individual whose address is Care of Trading 

Floor, Chicago Board of Trade, 141 West Jackson Boulevard, Chicago 4, Illinois, 

is now and was at all times material to this complaint a registered floor broker 

under the act and a member of the Chicago Board of Trade. 
Page 2 

VI 

Respondent James S. Schonberg, an individual whose address is Room 1480, 141 

West Jackson Boulevard, Chicago 4, Illinois, was at all times material to this 

complaint a member of the Chicago Board of Trade and a representative of the 

Uhlmann Grain Company, a registered futures commission merchant. 

VII 

The contracts resulting from the execution of the orders hereinafter 

described were capable of being used for hedging transactions in interstate 

commerce in wheat or the products or by-products thereof, or for determining the 

price basis of transactions in interstate commerce in wheat, or for delivering 

wheat sold, shipped, or received in interstate commerce. 

VIII 

On May 19, 1960, respondent James S. Schonberg, in his capacity as a 

representative of the aforesaid Uhlmann Grain Company, had in his possession an 

order to buy 25,000 bushels of May 1960 wheat futures on the Chicago Board of 

Trade for the account of a customer of his principal. Respondent James S. 

Schonberg filled the said order after the close of the trading session by means 

of direct and non-competitive negotiations with respondent Irwin M. Eisen, 

as a result of which respondent Schonberg purchased 25,000 bushels of May 1960 

wheat futures from respondent Eisen at $ 1.94 per bushel. By reason thereof, 

respondents James S. Schonberg and Irwin M. Eisen executed a purchase and sale 

of wheat for future delivery on or subject to the rules of a contract market 

otherwise than by open and competitive methods in the trading pit during the 

regular hours prescribed by such contract market for trading in wheat futures, 

in willful violation of section 1.38 of the regulations under the act (17 CFR 

1.38). 

IX 

On May 19, 1960, respondent Julian M. Marks, in his capacity as floor broker, 

had received for execution an order to purchase 25,000 bushels of May 1960 wheat 

futures for the account of the Ralston Purina Company, a registered futures 

commission merchant. Respondent Julian M. Marks filled the said order by taking 

the sale side thereof for his own account by means of transactions with 

respondent Stuart A. Newman which constituted accommodation trades on the part 

of respondent Newman. The said respondents entered into such transactions after 

direct and non-competitive negotiations between themselves, pursuant to which 

respondent Marks purchased 25,000 bushels of May 1960 wheat futures for the 

account of his principal from respondent Newman, 15,000 at $ 2.01-1/2 per bushel 

and 10,000 at $ 2.01-1/8 per bushel, and simultaneously sold the same quantities 

of the same future at the same prices for his own account to respondent Newman, 

who made the corresponding sales and purchases for his own account. By reason 

thereof, respondent Julian M. Marks willfully and knowingly and without the 

prior consent of his principal became the seller with respect to the buying 

order of such principal, in violation of section 4b(D) of the act (7 U.S.C. 1958 

ed., § 6b(D)); respondent Stuart A. Newman entered into accommodation trades in 

willful violation of section 4c(A) of the act (7 U.S.C. 1958 ed., § 6c(A)); and 

respondents Marks and Newman executed a purchase and sale of wheat for future 

delivery on or subject to the rules of a contract market otherwise than by open 

and competitive methods, in willful violation of section 1.38 of the regulations 

under the act (17 CFR 1.38). 

X 

On May 19, 1960, respondent Julian M. Marks, in his capacity as floor broker, 

had received for execution orders to sell 25,000 bushels of May 1960 wheat 
Page 3 

futures on the Chicago Board of Trade for the accounts of Goodbody and Company, 

and Paine, Webber, Jackson & Curtis, registered futures commission merchants, 

and other orders to buy 25,000 bushels of such futures on the said exchange for 

the account of the said Goodbody and Company. Respondent Marks filled the said 

orders by offsetting them against each other by means of transactions 

with respondent Stuart A. Newman which constituted accommodation trades on the 

part of respondent Newman. The said respondents entered into such transactions 

after direct and non-competitive negotiations between themselves, pursuant to 

which respondent Marks, acting for his principals, sold 25,000 bushels of May 

1960 wheat futures to respondent Newman, 20,000 at $ 1.96-1/2 per bushel and 

5,000 at $ 1.97 per bushel, and simultaneously purchased 25,000 bushels of such 

futures at $ 1.97 per bushel from respondent Newman, who made the corresponding 

purchases and sales for his own account. By reason thereof, respondent Julian 

M. Marks filled orders for the sale of futures by offset against orders of other 

persons for the purchase of futures, in willful violation of section 4b(D) of 

the act (7 U.S.C. 1958 ed., § 6b(D)); respondent Stuart A. Newman entered into 

accommodation trades in willful violation of section 4c(A) of the act (7 U.S.C. 

1958 ed., § 6c(A)); and respondents Marks and Newman executed purchases and 

sales of wheat for future delivery on or subject to the rules of a contract 

market otherwise than by open and competitive methods, in willful violation of 

section 1.38 of the regulations under the act (17 CFR 1.38). 

XI 

On May 19, 1960, respondent Julian M. Marks, in his capacity as floor broker, 

had received for execution orders to sell a quantity of May 1960 wheat futures 

on the Chicago Board of Trade for the account 

of D. R. Comenzo & Company, a registered futures commission merchant. 

Respondent Julian M. Marks filled a portion of the said orders after the close 

of the trading session, by taking the purchase side thereof for his own account 

by means of transactions with Irwin M. Eisen which constituted accommodation 

trades on the part of respondent Eisen. The said respondents entered into such 

transactions after direct and non-competitive negotiations between themselves, 

pursuant to which respondent Marks sold 35,000 bushels of May 1960 wheat futures 

for the account of his principal to respondent Eisen at $ 1.94 per bushel and 

simultaneously purchased the same quantity of the same future at the same price 

for his own account from respondent Eisen, who made the corresponding purchases 

and sales for his own account. By reason thereof, respondent Julian M. Marks 

willfully and knowingly and without the prior consent of his principal became 

the buyer with respect to the selling orders of such principal, in violation of 

section 4b(D) of the act (7 U.S.C. 1958 ed., § 6b(D)); respondent Irwin M. Eisen 

entered into accommodation trades in willful violation of section 4c(A) of the 

act (7 U.S.C. 1958 ed., § 6c(A)); and respondents Marks and Eisen executed 

purchases and sales of wheat for future delivery on or subject to the rules of a 

contract market otherwise than by open and competitive methods in the trading 

pit during the regular hours 

prescribed by such contract market for trading in wheat futures, in willful 

violation of section 1.38 of the regulations under the act (17 CFR 1.38). 

XII 

On May 19, 1960, respondent Julian M. Marks, in his capacity as floor broker, 

had received for execution an order to sell 5,000 bushels of May 1960 wheat 

futures on the Chicago Board of Trade for the account of the aforesaid Paine, 

Webber, Jackson & Curtis. Respondent Julian M. Marks did not execute the said 

order but bucketed the same by taking the purchase side thereof for his own 
Page 4 

account. In order to accomplish this, respondent Marks made entries on his 

trading card purporting to show a purchase of 5,000 bushels of May 1960 wheat 

futures at $ 2.02 per bushel, and directed one Max Nierman, another floor 

broker, to make entries on the trading card of the said Max Nierman purporting 

to show a corresponding sale by Nierman for the account of the said Paine, 

Webber, Jackson & Curtis, and the said Max Nierman complied with such request 

and made such entries. Respondent Marks thereupon reported or caused to be 

reported to his principal that the sale had been executed by the said Max 

Nierman at the aforesaid price. By reason of such acts, respondent Julian M. 

Marks bucketed an order for the sale of wheat for future delivery on or subject 

to the rules of a contract market, knowingly and without the prior consent of 

his principal 

became the buyer with respect to the selling order of such principal, caused 

false records to be entered and a false report to be made in connection with the 

execution of such order, and deceived the person from whom such order had been 

received with respect to the execution thereof, in willful violation of section 

4b of the act (7 U.S.C. 1958 ed., § 6b); and failed to keep full and complete 

records of a futures transaction, in willful violation of section 4g of the act 

(7 U.S.C. 1958 ed., § 6g) and section 1.35 of the regulations thereunder (17 CFR 

1.35). 

XIII 

On May 19, 1960, respondent Julian M. Marks turned over to respondent Stuart 

A. Newman for handling and execution, orders to sell a total of 40,000 bushels 

of May 1960 wheat futures on the Chicago Board of Trade for the account of the 

aforesaid Paine, Webber, Jackson & Curtis, which orders respondent Marks had 

theretofore received from the said firm. Respondent Newman thereupon sold to 

various other floor brokers 35,000 bushels of May 1960 wheat futures for the 

account of the said firm, 25,000 at $ 1.93 per bushel and 10,000 at $ 1.96 per 

bushel, but did not record the said sales on his own trading card. Instead, 

respondent Marks entered the said sales on his trading card as though such sales 

had been made by respondent Marks, and reported to his principal 

that the said sales had been so executed. Respondent Newman did not execute the 

remaining 5,000 bushels of the said selling orders but bucketed the same by 

taking the purchase side thereof for his own account. In order to accomplish 

this, respondent Newman made entries on his trading card purporting to show a 

purchase of 5,000 bushels of May 1960 wheat futures at $ 1.93 per bushel, and 

respondent Marks made corresponding entries on his trading card purporting to 

show a sale of the said quantity of such future at the said price, and reported 

to his principal that the sale had been executed. By reason of such acts, 

respondent Newman bucketed an order for the sale of wheat for future delivery on 

or subject to the rules of a contract market, and knowingly and without the 

prior consent of his principal became the buyer with respect to the selling 

order of such principal, in willful violation of section 4b(D) of the act (7 

U.S.C. 1958 ed., § 6b(D)); respondents Marks and Newman caused false records to 

be entered and false reports to be made in connection with the execution of 

orders for the sale of wheat for future delivery, and deceived the person from 

whom such orders had been received with respect to the execution thereof, in 

willful violation of sections 4b(B) and 4b(C) of the act (7 U.S.C. 1958 ed., §§ 

6b(B)(C)); and respondents Marks and Newman failed to keep full and complete 

records of futures transactions, in willful violation of section 4g of the act 

(7 U.S.C. 1958 ed., § 6g), and section 1.35 of the regulations thereunder (17 

CFR 1.35). 

XIV 
Page 5 

On May 19, 1960, respondent Marks turned over to respondent Stuart A. Newman 

for handling and execution, an order to buy 5,000 bushels of May 1960 wheat 

futures for the account of the aforesaid Paine, Webber, Jackson & Curtis, which 

order respondent Marks had theretofore received from the said firm. Respondent 

Newman did not execute the said order but bucketed the same by taking the sale 

side thereof for his own account at $ 2.01 per bushel, and respondent Marks then 

reported to his principal that its order had been executed at that price. 

Subsequently, upon complaint by Paine, Webber, Jackson & Curtis on behalf of the 

customer for whose account the order was placed, respondents Marks and Newman 

adjusted the price of the purported transaction to $ 1.98 per bushel. By reason 

of such acts, respondent Newman bucketed an order for the sale of wheat for 

future delivery on or subject to the rules of a contract market, and knowingly 

and without the prior consent of his principal became the seller with respect to 

the buying order of such principal, in willful violation of section 4b(D) of the 

act (7 U.S.C. 1958 ed., § 6b(D)); respondents Marks and Newman caused false 

records to be entered and a false report to be made in connection with the 

execution of such order, and deceived the person from whom such order had been 

received with respect to the execution thereof, in willful violation of sections 

4b(B) and 4b(C) of the act (7 U.S.C. 1958 ed., §§ 6b(B)(C)); and respondents 

Marks and Newman 

 

failed to keep full and complete records of futures transactions, in willful 

violation of section 4g of the act (7 U.S.C. 1958 ed., § 6g) and section 1.35 of 

the regulations thereunder (17 CFR 1.35). 

XV 

On May 19, 1960, respondent Marshall K. Smith, in his capacity as floor 

broker, had received for execution orders to sell 25,000 bushels of May 1960 

wheat futures for the account of Lamson Brothers, a registered futures 

commission merchant, and other orders to buy 25,000 bushels of such futures on 

the said exchange for the account of the said principal. Respondent Smith 

filled the said orders by offsetting them against each other by means of 

transactions with respondent Irwin M. Eisen which constituted accommodation 

trades on the part of respondent Eisen. The said respondents entered into such 

transactions after direct and non-competitive negotiations between themselves, 

pursuant to which respondent Smith, acting for his principal, sold 25,000 

bushels of May 1960 wheat futures to respondent Eisen at $ 1.98 per bushel and 

simultaneously purchased the same quantity of the same future at $ 1.98-1/2 per 

bushel from respondent Eisen, who made the corresponding purchases and sales for 

his own account. At the time of the said transactions, the price of the May 

1960 wheat futures on the Chicago Board of Trade was not in excess of $ 1.98 per 

bushel. By reason of the said acts, respondent Marshall K. Smith filled orders 

for the sale of futures 

 

by offset against the orders of other persons for the purchase of futures, and 

cheated and defrauded customers of his principal, in willful violations of 

sections 4b(D) and 4b(A) of the act (7 U.S.C. 1958 ed., §§ 6b(D)(A)); respondent 

Irwin M. Eisen entered into accommodation trades in willful violation of section 

4c(A) of the act (7 U.S.C. 1958 ed., § 6c(A)); and respondents Smith and Eisen 

executed purchases and sales of wheat for future delivery on or subject to the 

rules of a contract market otherwise than by open and competitive methods, in 

willful violation of section 1.38 of the regulations under the act (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 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 six copies, fully and completely stating the nature of the 

defense and admitting or denying, specifically and in detail, each material and 
Page 6 

relevant 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 material 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 and request a hearing, a hearing will be held at 

10:00 a.m., local time, on the 7th day of March 1961, in Chicago, Illinois, 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 revolting 

any registrations of the respondents under the act which may be then in effect, 

and directing that all contract markets refuse all trading privileges to the 

respondents for such period of time as may be determined. 

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

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

hearing. 

Done at Washington, D. C. 

January 13, 1961 

/s/ Clarence L. Miller 

Clarence L. Miller 

Assistant Secretary 

LOAD-DATE: June 12, 2008 
Page 7