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Commodity Futures Trading Commission 

CEA CASES 

NAME: CARL EDWIN PRESTON, AND PHILIP MICHAEL O'CONE 

DOCKET NUMBER: STIPULATION 42 

DATE: OCTOBER 15, 1959 

DOCUMENT TYPE: STIPULATION OF COMPLIANCE 

UNITED STATES DEPARMENT OP AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Carl Edwin Preston, and Philip Michael O'Cone 

Stipulation of Compliance No. 42 

Carl Edwin Preston and Philip Michael O'Cone, individuals whose address is 

No. 2 Broadway, New York 4, New York, are members of the New York Produce 

Exchange and registered floor brokers under the Commodity Exchange Act. They 

have been advised by the Commodity Exchange Authority of an investigation by it 

of certain transactions in cottonseed oil futures entered into by them on the 

New York Produce Exchange on December 9, 1958. The facts concerning these 

transactions are as follows: 

On or about December 9, 1958, Jack W. Sommers, a floor broker on the New York 

Produce Exchange, was offering to enter into certain so-called "switch" trades 

involving the March and May cottonseed oil futures in the quantity and on the 

basis set forth in the table below. The said Carl E. Preston discussed with the 

said Philip M. O'Cone the advisability of entering into these transactions with 

Sommers and they decided to do so. The said Carl E. Preston then arranged with 

Jack W. Sommers that Preston and O'Cone would take the opposite side of the 

"switch" trades being offered by Sommers, in the quantity and on the basis set 

forth below, and trades were made as shown. 

Bought Bold 

Clearing Price and Clearing Customer Broker Member Quantity Member Broker Customer

Sommers Coleman & Co. 20 Mar. @ 1303 Orvis Preston Preston 

O'Cone O'Cone Orvis 20 May @ 1305 McFadden Sommers 

Preston Preston Orvis 20 Mar. @ 1283 Coleman & Co. Sommers Sommers McFadden 20 May @ 1285 Orvis O'Cone O'Cone 

The effect of the above transactions was the purchase and sale of 20 

contracts of May cottonseed oil futures for the account of the said Philip M. 

O'Cone and the purchase and sale of 20 contracts of March cottonseed oil futures 

for the account of the said Carl E. Preston. 

The Commodity Exchange Authority has advised Carl E. Preston and Philip M. 

O'Cone that in its opinion the transactions above described are in violation of 

the Commodity Exchange Act and the regulations thereunder, particularly those 

portions relating to wash trades and the requirment that all trading be done 

openly and competitively. 

No complaint with respect to such violations has been issued and the said 

Carl E. Preston and Philip M. O'Cone are desirous of disposing of the matter by 

entering into a stipulation of compliance, as authorised by section 0.4(a) of 

the Rules of Practice under the Commodity Exchange Act (17 CFR, 0.0-0.28). 
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Therefore, Carl E. Preston and Philip M. O'Cone stipulate that the above 

statements regarding the transactions of December 9, 1958, are true, and agree 

to desist from such practices in the future and to comply fully with the 

requirements of the Commodity Exchange Act and the regulations of the Secretary 

of Agriculture thereunder; and specifically to refrain from executing wash 

trades or trades which call for execution otherwise than by open and competitive 

means. 

Carl E. Preston and Philip M. O'Cone hare been informed that the Commodity 

Exchange Authority may, in connection with its regulatory activities, publicise 

the facts concerning the transactions discussed herein in order that floor 

brokers, futures commission merchants, and all other users of the futures 

markets may be advised of the views of the Commodity Exchange Authority 

regarding matters of the type covered herein. 

/s/ Carl E. Preston 

Carl Edwin Preston 

/s/ Philip M. O'Cone 

Philip Michael O'Cone 

Witnessed by: 

/s/ Sheldon Coopersmith 

/s/ Hugh A. Collins 

(Signed in New York, New York, on October 15, 1959) 

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