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Commodity Futures Trading Commission 

CEA CASES 

NAME: FRED STROHMEIER, JR. 

DOCKET NUMBER: 88 

DATE: OCTOBER 31, 1958 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Fred Strohmeier, Jr., Respondent 

CEA Docket No. 88 

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

Act 

There is reason to believe that the respondent, Fred Strohmeier, Jr., has 

violated the provisions of the Commodity Exchange Act (7 U.S.C. 1952 ed., 

Chapter 1), and the rules and regulations of the Secretary of Agriculture made 

pursuant thereto (17 CFR, Part 1). In accordance with the provisions of section 

6(b) of the Commodity Exchange Act (7 U.S.C. 1952 ed. § 9), this complaint and 

notice of hearing is issued alleging as follows: 

I 

Respondent Fred Strohmeier, Jr., was at all times material to this complaint 

and is now a dealer in eggs with office and principal place of business located 

at Jeffersontown, Kentucky. 

II 

The Chicago Mercantile Exchange was at all times material to this complaint 

and is now a duly designated contract market under the Commodity Exchange Act. 

III 

During 1956 and 1958, the respondent traded in egg futures through various 

futures commission merchants in accounts carried under the names Fred 

Strohmeier, Strohmeier Egg Company, E. B. Strohmeier, and Eleanor Strohmeier. 

All such accounts were controlled by the respondent. 

IV 

On August 9 and 10, 1956, and on each day during the period from August 16, 

1956, through August 28, 1956, the respondent had a net short position in egg 

futures on the Chicago Mercantile Exchange which ranged from 25 carlots to 38 

carlots in a single future. On each day during the period, from August 19, 

1958, through August 22, 1958, the respondent had a net short position in egg 

futures on the Chicago Mercantile Exchange which ranged from 59 carlots to 89 

carlots in a single future. By reason of the fact that such quantities were 

equal to or in excess of 25 carlots, the respondent was in reporting status and 

was required to report to the Commodity Exchange Authority with respect to all 

transactions executed and all open contract positions held for his account in 

all egg futures on all boards of trade (exchanges) during the said periods, and 

with respect to 
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all such transactions by reason of which the respondent's position was reduced 

below reporting levels, as provided in section 4i of the Commodity Exchange Act 

(7 U.S.C. 1952 ed., § 6i) and sections 6.10, 6.11, 6.12, and 6.21 of the rules 

and regulations thereunder (17 CFR, 6.10, 6.11, 6.12, 6.21). 

V 

On eight (8) business days during the periods specified in paragraph IV 

hereof, while respondent was in reporting status as therein described, and on 

three (3) business days within the said periods, when the respondent's positions 

were reduced below 25 carlots, transactions in egg futures on the Chicago 

Mercantile Exchange were executed for his account, but the respondent has failed 

to report to the Commodity Exchange Authority with respect to such transactions, 

as required under the aforesaid provisions of the Commodity Exchange Act and the 

rules and regulations. 

VI 

On four occasions in 1956 officials of the Commodity Exchange Authority 

informed the respondent by mail of the reporting requirements with respect to 

egg futures under the Commodity Exchange Act and regulations, and requested 

submission of reports which were 

then due from the respondent, as described in paragraphs IV and V. The 

respondent was also informed in writing by the Administrator of the Commodity 

Exchange Authority on November 14, 1956, and again on August 26, 1953, of 

respondent's delinquencies in submitting reports, and notified that such 

delinquencies were a continuing violation of the law and could result in the 

institution of formal proceedings directed toward denial of trading privileges 

on contract markets. In the circumstances, the respondent was fully aware of 

his obligations under the Commodity Exchange Act and the rules and regulations 

with respect to the submission of required reports, and the failure to submit 

such reports constituted a knowing and wilful violation of section 4i of the 

Commodity Exchange Act and sections 6.10, 6.11, 6.12, and 6.21 of the rules and 

regulations thereunder. 

Therefore, the respondent, Fred Strohmeier, Jr., is hereby notified that a 

hearing will be held in this matter beginning at 10:00 a.m., local time, on the 

9th day of December, 1958, in Room 1200, 141 West Jackson Boulevard, Chicago, 

Illinois, before a referee designated to conduct such hearing. The respondent 

will have an opportunity at such hearing to show cause, if any there be, why an 

order should not be made directing all contract 

markets to refuse all trading privileges to him for such period of time as may 

be determined. The respondent 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 

five copies, fully and completely stating the nature of the defense and 

admitting or denying, specifically and in detail, each material and relevant 

allegation of this complaint. Allegations that are not answered will be deemed 

admitted for the purpose of this proceeding. 

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

respondent at least twenty (20) days prior to the date set for hearing. 

Done at Washington, D. C., this 

31st day of October, 1958. 

/s/ E. L. Peterson 

E. L. Peterson 

Acting Secretary 
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