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Commodity Futures Trading Commission 

CEA CASES 

NAME: MYERS AND COMPANY, AND A. H. MYERS 

CITATION: 27 Agric. Dec. 1070 

DOCKET NUMBER: 155 

DATE: SEPTEMBER 20, 1968 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 11,995) 

In re MYERS AND COMPANY, and A. H. MYERS. CEA Docket No. 155. Decided 

September 20, 1968. 

Undersegregation of funds -- Suspension of resigtrations -- Stipulation

Respondents consented to the issuance of an order suspending the registration 

of the corporate respondent as a futures commission merchant and the 

registration of the individual respondent as a floor broker for a period of 15 

days and directing all contract markets to refuse all trading privileges to them 

for a like period for violations of the act and the regulations involving the 

undersegregation of customers' funds and the making of daily records purporting 

to show that the total amount held in segregated accounts was in excess of that 

necessary to pay all credits and equities due customers, when in fact the 

corporation was undersegregated. 

John J. Casey for Commodity Exchange Authority. 

Elton L. Marshall, of Watson, Ess, Marshall & Enggas, Kansas City, Mo., for 

respondents. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is an administrative proceeding under the Commodity Exchange Act (7 

U.S.C. 1 et seq.), instituted by a complaint and notice of hearing issued under 

§ 6(b) of said Act (7 U.S.C. 9) by the Acting Secretary of Agriculture. The 

respondents are a Missouri corporation registered as a futures commission 

merchant, and an individual who is the president and a principal shareholder of 

the corporation and a registered floor broker. The respondents are charged with 

wilfully violating §§ 4d(2) and 4g of the Commodity Exchange Act (7 U.S.C. 6d(2) 

and 6g), and 

§§ 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 and 1.35). 

No hearing has been held. The respondents have submitted a stipulation under 

§ 0.4(b) of the rules of practice (17 CFR 0.4(b)), in which they admit the 

factual allegations of the complaint, waive hearing on the charges, and consent 

to the entry of the order contained herein. 

FINDINGS OF FACT

1. Respondent Myers and Company, a Missouri corporation with offices at 4800 

Main Street, Kansas City, Missouri, is now, and was at all times material 

herein, a registered futures commission merchant under the Commodity Exchange 

Act and so engaged in business. 
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2. Respondent A. H. Myers, an individual whose business address is the same 

as that of the respondent corporation, is now, and was at all times material 

herein, the president and a principal shareholder of the respondent corporation 

and a registered floor broker under the Commodity Exchange Act. At all such 

times, respondent A. H. Myers managed and controlled the business of the 

respondent corporation and was responsible for the corporate acts and 

transactions hereinafter described. 

3 a. At the times hereinafter stated, respondent Myers and Company, 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 regulations. 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 sums of money 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. On 88 business days during the period between September 1, 1966, and 

January 31, 1967, both inclusive, the respondent corporation was undersegregated in amounts ranging from $ 246.61 on September 13, 1966, to $ 

27,935.01 on October 24, 1966, that is, on the 88 days mentioned the total 

amount of customers' funds held in segregation as above described, was from $ 

246.61 to 

$ 27,935.01 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 during the period specified above 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 the daily computation and 

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

requirements of the regulations, during the period specified above, the 

respondent corporation showed that it had excess funds in segregation in amounts 

ranging from $ 222.89 to $ 144,129.88, whereas, in truth and in fact, the said 

corporation was under-segregated as specified above. 

4 a. On September 3, 1954, a complaint was filed pursuant to section 6(b) of 

the Commodity Exchange Act, naming as respondents the respondents in the instant 

proceeding and two other individuals, who were officers of the respondent 

corporation. The said complaint filed on September 3, 1954, alleged, inter 

alia, that respondent Myers and Company was under-segregated on various 

occasions within a period of approximately thirteen consecutive months in 1953 

and 1954 -- that is, that the total amount of customers' funds held in 

segregated accounts of the corporation with depositories was less than the sum 

necessary to pay all credits owing to such customers; that the corporation 

wrongfully withdrew funds from such accounts resulting in undersegregation; that 

it failed to compute and its books failed to show the amount of money, 

securities and property required to be held in segregation under the Commodity 

Exchange Act and the regulations thereunder; that such acts and omissions took 

place under the supervision and direction of the individual respondents; and 

that by reason thereof the respondents violated section 4d(2) of the Commodity 

Exchange Act and sections 1.20 and 1.27, inclusive, of the regulations 

thereunder (17 CFR 1.20-1.27). Such proceeding was terminated by the entry of a 

consent order on February 1, 1955, imposing sanctions against respondents Myers 

and Company and A. H. Myers. 

b. Subsequent to the entry of the order in the above-mentioned proceeding and 

prior to the acts and omissions described 
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in Finding of Fact 3 above, the Commodity Exchange Authority examined the 

records of the respondent corporation as of June 28, 1957, December 30, 1960, 

and April 30, 1962, and on each such occasion notified respondent A. H. Myers 

that the examination had disclosed that the respondent corporation was in an 

under-segregated condition and discussed the matter with him. 

CONCLUSIONS

By reason of the facts set forth in the Findings of Fact, it is concluded 

that, as charged in the complaint, respondents Myers and Company, and A. H. 

Myers, wilfully violated §§ 4d(2) and 4g of the Commodity Exchange Act (7 U.S.C. 

6d(2) and 6g) and §§ 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 and 1.35). 

The complainant states that the administrative officials of the Commodity 

Exchange Authority have carefully considered the stipulation and waiver 

submitted by respondents Myers and Company and A. H. Myers. The administrative 

officials believe that the prompt entry of an order providing for the proposed 

suspension of the respective registrations of the two respondents and providing 

for the proposed refusal of trading privileges, would effectuate the purposes of 

the Commodity Exchange Act. The complainant recommends, therefore, that the 

stipulation and waiver be accepted and such a decision and order be issued. 

It is concluded that the complainant's recommendation should be adopted. 

ORDER

Effective on the thirtieth day after the date of issuance of this order, (1) 

the registration of respondent Myers and Company as a futures commission 

merchant and the registration of respondent A. H. Myers as a floor broker are 

suspended for a period of fifteen (15) days, and (2) all contract markets shall 

refuse all trading privileges to the said respondents for a period of fifteen 

(15) days, such refusal to apply to all trading done and positions held by them, 

directly or indirectly. 

A copy of this Decision and Order shall be served on each of the parties and 

on each contract market. 

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