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Commodity Futures Trading Commission 

CEA CASES 

NAME: GREENE & COLLINS INC., A. LAWRENCE CARROLL, AND J. ROBERT COLLINS 

DOCKET NUMBER: 235; 75-15 

DATE: JANUARY 17, 1975 

DOCUMENT TYPE: COMPLAINT 

NOTE: LATER BECAME CFTC DOCKET # 75-15 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Greene & Collins, Inc., A. Lawrence Carroll, and J. Robert Collins, 

Respondents 

CEA Docket No. 235 

Complaint and Notice of Hearing Under the Commodity Exchange Act 

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

Exchange Act (7 U.S.C. 1 et seq.), and the regulations issued thereunder (17 CFR 

1.1 et seq.), and therefore this Complaint and Notice of Hearing is issued 

alleging the following: 

I 

Respondent Greene & Collins, Inc., an Illinois corporation with its principal 

office and place of business at 175 West Jackson Boulevard, Chicago, Illinois 

60604, is now, and was at all times material herein, a registered futures 

commission merchant under the Commodity Exchange Act, and a clearing member of 

the MidAmerica Commodity Exchange, engaged in trading in commodities for future 

delivery. 

II 

Respondent A. Lawrence Carroll, an individual whose business address is the 

same as that of the corporate respondent, was at all times material herein 

President and a stockholder of respondent Greene & Collins, Inc., a member of 

the MidAmerica Commodity Exchange, and 

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

times, respondent Carroll took an active part in the management and control of 

respondent Greene & Collins, Inc. 

III 

At all times material herein, respondent J. Robert Collins was Vice President 

and Secretary and a stockholder of respondent Greene & Collins, Inc., a member 

of the MidAmerica Commodity Exchange, and registered as a floor broker under the 

Commodity Exchange Act. At all such times, respondent Collins took an active 

part in the management and control of respondent Greene & Collins, Inc. 

IV 

On December 31, 1973, and January 31, 1974, the respondent corporation was 

engaged in business as a registered futures commission merchant under the 

Commodity Exchange Act, notwithstanding that on both dates it failed to meet the 

minimum financial requirements under section 4f of the Commodity Exchange Act (7 

U.S.C. 6f) and section 1.17 of the regulations issued thereunder (17 CFR 1.17). 

As of December 31, 1973, the respondent corporation lacked approximately $ 
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15,000 of having sufficient capital to meet such minimum financial requirements, 

and on January 31, 1974, it lacked approximately $ 150,000 of having sufficient 

capital to meet such minimum financial requirements. 

V 

Under section 1.10 of the regulations issued pursuant to the Commodity 

Exchange Act (17 CFR 1.10), the respondent corporation was 

obligated at all times material herein to prepare a written computation of its 

net worth at least once each month. Whenever such computations showed, or the 

respondent knew or had reason to believe, that its net worth had declined 20 

percent or more from its net worth as shown in the previous report of its 

financial condition, the respondent corporation was obligated to immediately 

notify the Commodity Exchange Authority. During the months of December, 1972 

and October, November and December 1973, the respondent corporation's net worth 

had so declined 20 percent or more, as set forth below, and said respondent 

failed to so notify the Commodity Exchange Authority: 

Approximate Percentage

Month Decrease 

December, 1972 84%

October, 1973 21%

November, 1973 33%

December, 1973 91%

VI 

Section 1.17 of the regulations promulgated under the Commodity Exchange Act 

(17 CFR 1.17) obligates the respondent corporation to file with the Commodity 

Exchange Authority two copies of any subordination agreement within ten days 

after such agreement is entered into. As of January 31, 1974, respondent Greene 

& Collins, Inc., had a total of $ 285,000 in subordinated borrowings from five 

individuals. Although 

each of the subordinated loan agreements for these borrowings was executed on 

December 28, 1973, copies of such agreements were not filed with the Commodity 

Exchange Authority until March 19, 1974. 

VII 

Section 4d(2) of the Commodity Exchange Act (7 U.S.C. 6d(2)) and section 1.32 

of the regulations issued thereunder (17 CFR 1.32) obligate respondent 

corporation to keep a daily record of all money, securities, and property which 

must be maintained in segregated accounts. The segregation record of respondent 

Greene & Collins, Inc., dated January 31, 1974, contained a material error and 

an inaccurate entry, namely, a failure to create a segregated account for a 

customer, David Steele, and an understatement of cash margin on deposit with the 

New York Mercantile Exchange. Further, respondent corporation failed to prepare 

a segregation record for September 28, 1973. 

VIII 

At all times material herein, the respondent corporation was required by 

section 1.20 of the regulations issued under the Commodity Exchange Act (17 CFR 

1.20) to deposit all money and securities received to margin, guarantee, or 

secure the trades or contracts of regulated commodity customers under an account 

name which will clearly show that they are customers' money or securities. 

Respondent corporation was further required by section 1.20 of the regulations 

to obtain an acknowledgment from the bank, clearing organization, or futures 

commission 
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merchant with whom such money or securities were deposited that it was informed 

that the money or securities so deposited were those of commodity customers. 

As of January 31, 1974, respondent Greene & Collins, Inc., deposited 

customer-owned securities and customer funds into accounts with the Continental 

Illinois National Bank, the Madda Trading Company and the New York Mercantile 

Exchange which accounts were not clearly and properly identified as customers' 

securities and funds. Further, respondent Greene & Collins, Inc. failed to 

obtain an acknowledgment from said Bank, Company, and Exchange that they were 

informed that the securities and funds so deposited were those of commodity 

customers. 

IX 

As of January 31, 1974, respondent corporation's record of regulated 

customer-owned securities inaccurately reflected the number of shares of 

securities on deposit to margin regulated trades in violation of section 1.36 of 

the regulations issued under the Commodity Exchange Act (17 CFR 1.36). Further, 

the January 1974, monthly activity statements sent to two customers, Harold 

Goodman and Richard Sohack, did not show the correct value of securities on 

deposit with the respondent corporation to margin regulated trades in violation 

of section 1.33 of the regulations issued pursuant to the Commodity Exchange Act 

(17 CFR 1.33). 

X 

At all times material herein, respondent corporation was required by section 

1.35 of the regulations issued pursuant to the Commodity Exchange Act (17 CFR 

1.35) to prepare, regularly and promptly, and keep 

systematically and in permanent form, a record or journal which will show for 

each business day, complete details of all commodity futures transactions 

executed on that day. Included within such records were to be the date, price, 

quantity, market, commodity, future and the person for whom such transaction was 

made. As of January 31, 1974, respondent Greene & Collins, Inc. failed to 

maintain a record with the identity of the person for whom each transaction was 

made on the New York Mercantile Exchange. 

XI 

Section 1.46 of the regulations issued pursuant to the Commodity Exchange Act 

(17 CFR 1.46) requires a futures commission merchant who purchases or sells any 

commodity for future delivery for any customer, when the account of such 

customer at the time of such transaction has, respectively, a short position in 

the same future of the same commodity on the same market, or a long position in 

the same future of the same commodity on the same market, to apply such purchase 

or sale against any previously held position. As of January 31, 1974, the 

accounts of two regulated customers of respondent Greene & Collins, Inc., Harold 

Goodman and Richard Dennis, carried speculatively long and short positions in 

the same commodity and future traded on the MidAmerica Commodity Exchange. 

XII 

At all times material herein, respondent Greene & Collins, Inc., was required 

by section 4g of the Commodity Exchange Act (7 U.S.C. 6g) and section 17.00 of 

the regulations issued pursuant to the 

Commodity Exchange Act (17 CFR 17.00) to submit to the Commodity Exchange 

Authority series '01 reports with respect to all Special Accounts showing each 

reportable position, separately for each contract market and for each future in 

such account as of the close of the market on the day covered by the report. 
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The respondent corporation filed such reports; however, the '01 report as of 

January 31, 1974 was inaccurate with respect to such reportable positions, 

summarized as follows: 

Commodity Position Positions Per 

Customer Market & Future Per Audit '01 Report Difference 

L S L S L S 

Harold MidAmerica March -- 270 -- -- -- [270]

Goodman Wheat Richard MidAmerica May -- 709 -- 735 -- 26

Dennis Soybeans 

XIII 

By reason of the facts alleged herein, the respondents have wilfully violated 

sections 4d(2), 4f(2), and 4g of the Act (7 U.S.C. 6d(2), 6f(2), 6g) and 

sections 1.10, 1.17, 1.20, 1.32, 1.33, 1.35, 1.36, 1.46, and 17.00 of the 

regulations issued pursuant to the Act (17 CFR 1.10, 1.17, 1.20, 1.32, 1.33, 

1.35, 1.36, 1.46, and 17.00). 

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 

Commodity Exchange Act (17 CFR 0.1, 0.2, 

0.4(b), 0.5 through 0.22 and 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 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 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 respondents are hereby notified that unless 

such hearing is waived, the hearing will be held in Chicago, Illinois, at a 

place therein and date to be specified later, before an Administrative Law Judge 

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 Commodity Exchange Act directing 

that the respondents shall cease and desist from violating the Act and the 

regulations in the manner alleged herein. 

Done at Washington, D. C. 

January 17, 1975 

[SEE SIGNATURE IN ORIGINAL] 

RICHARD L. FELTNER 

Assistant Secretary 

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