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Commodity Futures Trading Commission 

CEA CASES 

NAME: THE SIEGEL TRADING CO., INC., JOSEPH E. SIEGEL, ALVIN C. WINOGRAD, AND D. 

PETER ANDERSON 

DOCKET NUMBER: 159 

DATE: MAY 5, 1969 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: The Siegel Trading Co., Inc., Joseph E. Siegel, Alvin C. Winograd, and D. 

Peter Anderson, Respondents 

CEA Docket No. 159 

Complaint and Notice of Hearing Under the Commodity Exchange Act 

There is reason to believe that the respondents have violated the Commodity 

Exchange Act, as amended (7 U.S.C. 1 et seq.; Public Law 90-258) and the 

regulations made pursuant thereto (17 CFR, Chapter I), and in accordance with 

the provisions of sections 6(b) and 6(c) of the said act, this complaint and 

notice of hearing is issued stating the charges in that respect as follows: 

I 

Respondent The Siegel Trading Co., Inc., whose business address is 100 North 

La Salle Street, Chicago, Illinois, is now, and was at all times material 

herein, a corporation organized and existing under the laws of the State of 

Illinois, with its principal office and place of business in Chicago and branch 

offices at New York City and various other cities. The said corporation is now, 

and was at all such times, a clearing member of the Chicago Mercantile Exchange 

and the New York Mercantile Exchange, and a registered futures commission 

merchant under the Commodity Exchange Act, engaged in the business 

of trading in commodities for future delivery for the accounts of customers. 

II 

Respondents Joseph E. Siegel and Alvin C. Winograd, individuals, whose 

business address is 100 North La Salle Street, Chicago, Illinois, are now, and 

were at all times material herein, President and Secretary-Treasurer, 

respectively, of the respondent corporation and registered floor brokers under 

the Commodity Exchange Act. At all such times the said respondents managed the 

business of the respondent corporation and the acts and transactions hereinafter 

described were initiated and carried out under their supervision as officers of 

the respondent corporation. 

III 

Respondent D. Peter Anderson, an individual whose business address is The 

Siegel Trading Co., Inc., 100 Hudson Street, New York, New York, is now, and was 

at all times material herein, employed by the respondent corporation as an 

account executive in its New York office. 

IV 
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The Chicago Mercantile Exchange, the New York Mercantile Exchange and the New 

York Cotton Exchange are now, and were at all times material herein, duly 

designated contract markets under the Commodity Exchange Act. 

V 

On April 22 and 23, 1968, the respondent corporation, acting pursuant to 

orders given by respondent D. Peter Anderson on behalf of customers for whom he 

traded on a discretionary basis, executed purchases and sales of May 1968 Maine 

potato futures on the New York Mercantile Exchange, which in the regular course 

of business would have been closed out on a "day trade" basis. Instead of 

closing out such purchases and sales on a "day trade" basis, the said 

respondents wilfully offset the sales against purchases made on earlier days and 

thereafter offset the purchases against sales made on subsequent days. Closing 

out the purchases and sales made on April 22, 1968, and those made on April 23, 

1968, in the manner described above, caused the customers to pay to the 

respondent corporation in connection with such trades, twice the amount of 

commissions that the customers would have paid if such trades had been closed 

out on a "day trade" basis, and operated to conceal from the customers for a 

period of time the true status of their accounts. With respect to such trades, 

the following tabulation shows (1) the names of the customers, (2) the quantity 

(one side only) executed each day for each customer, (3) the close-out 

commissions paid by each customer, (4) the financial results reported by the 

respondent corporation to each customer with respect to the transactions in 

which the sales made for the customer's account were offset against his 

previously held position, and (5) the commissions that would 

have been payable by each customer and the financial results that would have 

been reported to each customer, if the purchases and sales had been closed out 

on a "day trade" basis. 

See original document-page 4 

Commissions Payable And 

Number of Commissions Paid Financial Results 

Date Contracts and Financial If Trades Closed 

Customer April (One Side Results Reported Out On Day Trade 

1968 Only) Basis 

Commission Profit Commission Profit Los 

George 23 15 $ 375.00 $ 4,560.00 $ 187.50 $ 560.00 $ 

Faludi 

J. Edward 22 9 225.00 1,240.00 112.50 135 

Kelly, Jr. 23 11 275.00 1,895.00 137.50 545.00 

John L. 23 3 75.00 865.00 37.50 75.00 

Renjilian Jerome 22 11 275.00 1,230.00 137.50 165 

Schneir 23 14 350.00 2,415.00 175.00 460.00 Thomas 22 8 200.00 920.00 100.00 120 

Tracey 23 10 250.00 1,715.00 125.00 320.00 Herbert 22 6 150.00 510.00 75.00 75.00 

Weinstock 23 10 250.00 1,735.00 125.00 545.00 

VI 

The respondent corporation made entries in its books as of March 7, 1968, 

purporting to show that on that day it had purchased and sold March 1968 No. 2 
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cotton futures on the New York Cotton Exchange for the accounts of its 

customers, as follows: 

Price 

Number of Per 

Pound 

 

Contracts (Cents) Customer 

Purchased Sold 

1 31.42 Don C. Como 

2 31.42 Robert E. Dorroh 

6 31.42 Alan R. Schrift 

1 31.42 J. J. Neal 

1 31.51 J. L. Lewis, Jr. 

The respondent corporation confirmed to each such customer each such trade 

purportedly made for his account. On the same date, March 7, 1968, the 

respondent corporation made additional entries in its books purporting to show 

that on that day it had sold one contract of March 1968 No. 2 cotton futures at 

a price of 31.42 cents per pound for its house account. In truth and in fact, 

as the respondent corporation knew, none of such sales and only four of such 

purchases were actually executed. 

VII 

On October 3, 1967, the respondent corporation received an order from Joseph 

E. Monahan, a customer, to purchase 100 bales of March 1968 No. 2 cotton futures 

on the New York Cotton Exchange at a price 

of 31.92 cents per pound or better for his account. On the same day, the 

respondent corporation executed the said order at a price of 31.86 cents per 

pound and thereupon orally reported its execution to Joseph E. Monahan. The 

respondent corporation subsequently refused to confirm such execution in writing 

and on or about November 1, 1967, reported to Joseph E. Monahan that the said 

order had not been executed. 

VIII 

The futures transactions described in paragraphs V through VII were capable 

of being used for hedging transactions in interstate commerce in such 

commodities or the products or byproducts thereof, or for determining the price 

basis of transactions in interstate commerce in such commodities, or for 

delivering such commodities sold, shipped, or received in interstate commerce. 

IX 

(a) As of April 19, 1968, the respondent corporation had failed to make any 

computation or permanent record, as of the close of business on April 15, 16 and 

17, 1968, of the amount of money, securities, and property required to be held 

in segregated account in order to pay the credits and equities due to its 

customers, as provided in section 1.32 of the regulations (17 CFR 1.32) and as 

of August 12, 1968, had failed to make any such computation or record as of the 

close of business on August 1, 2, 5, 6, 7, 8 and 9, 1968. 

(b) The segregation record prepared by the respondent corporation for March 

29, 1968, was incomplete and inaccurate to an extent which made it impossible to 

determine whether the funds held by the respondent corporation for customers 

were, in fact, sufficient to pay all credits and equities due to customers. 

(c) In preparing the daily computation and record of the amount of money, 

securities and property required to be held in segregation in order to pay the 

credits and equities due its customers during the period from November 29, 1967 

through March 29, 1968, the respondent corporation failed to take into 

consideration the payments made to, and the payments received from, its carrying 

brokers for its customers' accounts. Such payments were in varying amounts 

ranging from $ 10,000 to $ 350,000. 
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(d) Between April 9 and July 16, 1968, the respondent corporation failed to 

keep a daily record showing, for each transaction executed by it on the Chicago 

Mercantile Exchange, the identity of the customer for whose account the 

transaction was executed and the identity of the floor broker on the opposite 

side of the transaction, as required by section 1.35 of the regulations (17 CFR 

1.35). 

(e) Between on or about August 1, 1967 and March 29, 1968, the respondent 

corporation failed to prepare contract ledger accounts showing its customers' 

trades carried with other futures commission merchants. 

X 

On January 10, 1964, pursuant to section 0.4(a) of the rules of practice 

governing administrative proceedings under the Commodity Exchange Act (17 CFR 

0.4(a)), respondents The Siegel Trading Co., Inc., Joseph E. Siegel and Alvin C. 

Winograd entered into a stipulation in which they admitted: 

As of December 10, 1963, The Siegel Trading Co., Inc., had failed to compute 

and keep a record as of the close of the market on each of 23 business days from 

November 5 through December 9, 1963, showing the amount of money, security, and 

property owing or accruing to its customers which it was required to have in 

segregated account for such customers in order to comply with the requirements 

of section 4d(2) of the Commodity Exchange Act. Previous failures to compute 

and keep such records were discussed with Joseph E. Siegel and Alvin C. Winograd 

by CEA accountants at various times, and continuing failures were called to the 

attention of Joseph E. Siegel and The Siegel Trading Co., Inc., by the Act 

Administrator in a letter dated October 18, 1963. 

The said respondents, in such stipulation, admitted that "the acts and 

practices on the part of The Siegel Trading Co., Inc.," described above, "were 

directed and carried out under the supervision and control of respondents Joseph 

E. Siegel and Alvin C. Winograd in their capacities as president and secretary, 

respectively, of The Siegel Trading Co., Inc.," and agreed that they would 

"desist from such acts and practices in the future." 

XI 

By reason of the facts alleged in this complaint, (1) each of the respondents 

attempted to cheat and defraud and cheated and 

defrauded customers, wilfully attempted to deceive and deceived customers, in 

violation of section 4b of the Commodity Exchange Act (7 U.S.C. 6b), and (2) 

respondents The Siegel Trading Co., Inc., Joseph E. Siegel and Alvin C. Winograd 

wilfully made false reports to customers, wilfully entered false records with 

respect to the trades and contracts of customers, wilfully confirmed fictitious 

trades, bucketed customers' orders, wilfully failed to prepare and maintain, or 

cause the preparation and maintenance of, the records required under the 

Commodity Exchange Act and regulations as a basis for the segregation of, and 

accounting for, customers' funds, and wilfully failed and refused to keep the 

books and records pertaining to futures transactions in the form and manner 

required by the Secretary of Agriculture, in violation of sections 4b, 4c, 4d 

and 4g of the Commodity Exchange Act (7 U.S.C. 6b, 6c, 6d and 6g) and sections 

1.23, 1.32 and 1.35 of the regulations (17 CFR 1.23, 1.32 and 1.35). 

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

served upon the respondents 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 

act (17 CFR 0.1, 0.2, 0.4(b), 0.5 through 0.22, 0.28). 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 three copies, fully and completely stating 

the nature of the defense and admitting or denying, specifically 
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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 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 this complaint are admitted likewise shall 

constitute a waiver of hearing unless a hearing is requested. The respondents 

are hereby notified that unless a hearing is waived, a hearing will be held at 

10:00 a.m., local time, on June 24, 1969, 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 appropriate order should not be issued in 

accordance with the act, (1) prohibiting the respondents from trading on or 

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

markets refuse all trading privileges to the respondents for such period of time 

as may be determined, (2) directing that the respondents shall cease and desist 

from violating the act and regulations in the manner alleged herein, (3) 

suspending or revoking the registration of respondent The Siegel Trading Co., 

Inc., as futures commission merchant, and (4) suspending or revoking the 

registrations of respondents Joseph E. Siegel and Alvin C. Winograd as floor 

brokers. 

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. 

May 5, 1969 

[SEE SIGNATURE IN ORIGINAL] 

Richard E. Lyng 

Assistant Secretary 

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