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Commodity Futures Trading Commission 

CEA CASES 

NAME: H. SACKS & SONS, JULIUS SACKS, ALLEN JOHNSON 

DOCKET NUMBER: 80 

DATE: MARCH 6, 1958 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: H. Sacks & Sons, a partnership, and Julius Sacks, Respondents 

CEA Docket No. 80 

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

Act 

There is reason to believe that respondents, H. Sacks & Sons, a partnership, 

and Julius Sacks, have 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 H. Sacks & Sons was at all times material to this complaint and is 

now a partnership with offices and principal place of business located at East 

Quogue, Long Island, New York. The said partnership enjoys membership trading 

privileges on the New York Mercantile Exchange. 

II 

Respondent Julius Sacks was at all times material to this complaint and is 

now a member of the respondent partnership and controlled and was responsible 

for execution of the partnership transactions hereinafter described. The said 

Julius Sacks was at all times material herein a member of the New York 

Mercantile Exchange. 

III 

The New York Mercantile Exchange has been at all times material to this 

complaint and is now a duly designated contract market under the Commodity 

Exchange Act. 

IV 

On each day during the period from September 20, 1957, through February 12, 

1958, the respondent partnership had a net short or net long open contract 

position in potato futures on the New York Mercantile Exchange which ranged from 

25 carlots to 57 carlots in a single future. By reason of the fact that such 

quantities were equal to or in excess of 25 carlots, said respondent partnership 

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 its account in all potato futures on all boards of trade 

(exchanges) during the said period, and with respect to all such transactions by 

reason of which said respondent's position was reduced below 
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reporting levels, as provided in section 41 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 thirty-four (34) business days within the period specified in paragraph IV 

hereof, while respondent partnership was in reporting status as therein 

described, and on the business day immediately thereafter, February 13, 1958, 

when respondent's position was reduced below 25 carlots, transactions in potato 

futures on the New York Mercantile Exchange were executed for its account, but 

said respondent partnership has failed and refused 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 numerous occasions dating as far back as September 23, 1948, and 

continuing up to October 8, 1957, officials of the Commodity Exchange Authority 

not only informed said respondents of the reporting requirements under the 

Commodity Exchange Act and regulations but also found it necessary to 

communicate with respondents, in writing and by telephone, directing attention 

to respondents' (a) failure to 

file reports required to show reportable transactions and positions in potato 

futures on contract markets; (b) filing of reports showing cumulative trades and 

positions for an entire month instead of filing a report for each day on which 

trades or transactions were made while in a reporting status, as required by the 

regulations, and (c) filing incorrect reports. Respondent partnership was also 

informed in writing by the Administrator of the Commodity Exchange Authority of 

its delinquencies in submitting reports, that such delinquencies were a 

continuing violation of the law, and that continuing failure in this regard 

could result in the institution of formal proceedings directed toward denial of 

trading privileges on contract markets. On one occasion, respondent Julius 

Sacks wrote a letter to the New York Office of the Commodity Exchange Authority 

with respect to the filing of daily reports. In the circumstances, respondents 

H. Sacks & Sons and Julius Sacks were fully aware of their obligations under the 

Commodity Exchange Act and the rules and regulations with respect to filing of 

required reports, and that failure to submit such reports, as required, 

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. 

Respondents are hereby notified that a hearing will be held in this matter 

beginning at 10:00 a.m. local time, on the 1st day of May, 1958, in Room 202, 44 

Beaver Street, New York, New York, before 

a referee designated to conduct such hearing. Respondents 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 

the respondents for such period of time as may be determined. The respondents 

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 

respondents at least twenty (20) days prior to the date set for hearing. 
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Done at Washington, D. C., this 

6th day of March, 1958. 

/s/ Don Paarlberg 

Don Paarlberg 

Assistant Secretary 

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