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Commodity Futures Trading Commission 

CEA CASES 

NAME: JAY H. SCHMIDT 

CITATION: 22 Agric. Dec. 134 

DOCKET NUMBER: 107 

DATE: FEBRUARY 8, 1963 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 8184) 

In re JAY H. SCHMIDT. CEA Docket No. 107. Decided February 8, 1963. 

Reports -- Trading Limits -- Denial of Trading Privileges -- Consent Order

Respondent consented to an order directing all contract markets to refuse all 

trading privileges to respondent for 15 days. 

Mr. Earl L. Saunders, for Commodity Exchange Authority. Mr. Mitchell Edelson, 

Jr., of Chicago, Illinois, for respondent. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

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

U.S.C. Chapter 1), in which the respondent is charged with failing to submit a 

required report concerning transactions in egg futures on the Chicago Mercantile 

Exchange, with submitting false reports concerning transactions in egg futures, 

and with exceeding the maximum speculative trading and position limits in 

January 1962 shell egg futures, in violation of the act and the regulations 

issued thereunder. 

No hearing has been held with respect to this proceeding. On January 28, 

1963, the respondent submitted a stipulation under § 0.4(b) of the rules of 

practice (17 CFR 0.4(b)), in which he admits the facts hereinafter set forth 

under "Findings of Fact," waives hearing on the charges in the complaint, and 

consents to the entry of the order contained herein. 

FINDINGS OF FACT

1. Respondent, Jay H. Schmidt, is an individual whose address is 3950 Lake 

Shore Drive, Chicago, Illinois. 

2. The Chicago Mercantile Exchange is now, and was at all times material 

herein, a duly designated contract market under the Commodity Exchange Act. 

3. On January 10, 11, and 12, 1962, the respondent held or controlled a net 

long position in shell egg futures on the Chicago Mercantile Exchange, which 

position ranged from 34 carlots to 64 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 or controlled by him, in all egg futures on all boards of trade 

(exchanges) on said dates and with respect to all 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. § 6i) and sections 15.01, 
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15.02, 15.03, 18.00, 18.01 and 18.03 of the regulations thereunder (17 CFR 

15.01, 15.02, 15.03, 18.00, 18.01, 18.03). 

4. On January 10, 11, 12, 1962, while the respondent was in reporting status 

as described in paragraph 3, and on January 15, 1962, when the respondent's 

position was reduced below 25 carlots, transactions in shell egg futures on the 

Chicago Mercantile Exchange were executed on his behalf, but the respondent 

failed or refused to submit a report to the Commodity Exchange Authority with 

respect to January 10, 1962, and submitted false reports with respect to January 

11, 12, and 15, 1962. 

5. During the period January 11 through January 15, 1962, the respondent held 

a speculative net long position in January 1962 shell egg futures on the Chicago 

Mercantile Exchange which ranged between 60 carlots and 64 carlots. 

6. On January 15, 1962, the respondent made speculative sales of 65 carlots 

of January 1962 shell egg futures on the Chicago Mercantile Exchange. 

CONCLUSIONS

Section 4i of the act (7 U.S.C. 6i) requires every person who trades in 

commodity futures to submit reports with respect to such trading "whenever such 

person shall directly or indirectly have or obtain a long or short position in 

any commodity or in any future of such commodity, equal to or in excess of such 

amount as shall be fixed from time to time by the Secretary of Agriculture." 

This section is implemented by sections 15.01, 15.02, 15.03, 18.00, 18.01, and 

18.03 of the regulations (17 CFR 15.01, 15.02, 15.03, 18.00, 18.01, 18.03) which 

provide that a trader who holds or controls open contracts of 25 or more carlots 

of shell eggs in any one egg future shall be in reporting status and shall 

submit reports to the Commodity Exchange Authority for the first day on which he 

acquires a reportable position, for each day thereafter on which he has 

transactions 

in any future of such commodity on any contract market or delivers or receives 

delivery of such commodity, and for the first day on which he no longer holds or 

controls a reportable position. It is established in findings of fact 3 and 4 

that respondent was in reporting status with respect to January shell egg 

futures on January 10, 11, 12, and 15, 1962, but that he failed and refused to 

file a report on January 10, and filed false reports on January 11, 12, and 15, 

all in violation of the sections of the act and of the regulations cited above. 

Section 4a of the Commodity Exchange Act (7 U.S.C. § 6a) empowers the 

Commodity Exchange Commission to "fix such limits on the amount of trading under 

contracts of sale of . . . [a] commodity for future delivery on or subject to 

the rules of any contract market which may be done by any person as the 

Commission finds is necessary to diminish, eliminate, or prevent" burdens on 

interstate commerce caused by excessive speculation. Pursuant to this section, 

a limit on the maximum net long or net short speculative position which any 

person may hold or control in the January shell egg future on or subject to the 

rules of any, one contract market was established as 50 carlots (17 CFR § 

150.5). Likewise, a limit on the maximum speculative purchases and on the 

maximum speculative sales any person may make in the January shell future on or 

subject to the rules of any one contract market during any one business day was 

established as 50 carlots (17 CFR § 150.5). Findings of Fact 5 and 6 establish 

that respondent held a speculative net long position in January 1962 shell egg 

futures on the Chicago Mercantile Exchange in excess of said 50 carlot position 

limitation on each day during the period of January 11 through January 15, 1962, 

and made speculative sales of January shell egg futures on January 15, 1962, in 

excess of the 50 carlot daily trading limit, all in violation of § 4a of the act 

and § 150.5 of the regulations issued by the Commodity Exchange Commission. 

The complainant states that the administrative officials of the Commodity 

Exchange Authority have carefully considered the proposed stipulation and order, 

and that they believe that the proposed sanction is adequate and that the prompt 
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entry, without further proceedings, of the order to which the respondent has 

consented will constitute a satisfactory disposition of this case as against the 

respondent, serve the public interest, and effectuate the purposes of the Act. 

The complainant, therefore, recommends that the stipulation and waiver submitted 

by the respondent 

be accepted and that the proposed order be issued. It is so concluded. 

ORDER

Effective March 15, 1963, all contract markets shall refuse all trading 

privileges to the respondent, Jay H. Schmidt, for a period of 15 days, such 

refusal to apply to all trading done and all positions held by the respondent 

directly or indirectly. 

A copy of this decision and order shall be served on the respondent and on 

each contract market. 

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