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Commodity Futures Trading Commission 

CEA CASES 

NAME: EDWARD R. BYER 

CITATION: 13 Agric. Dec. 1051 

DOCKET NUMBER: 62 

DATE: NOVEMBER 10, 1954 

DOCUMENT TYPE: DECISION AND ORDER 

NOTE: CORRECTION TO SYLLABUS IS REPORTED IN 13 AGRIC. DEC. 1144 

AGRICULTURE DECISIONS

BEFORE THE SECRETARY OF AGRICULTURE

UNITED STATES DEPARTMENT OF AGRICULTURE

(No. 4092) 

In re EDWARD R. BYER et als. CEA Docket No. 62. Decided November 10, 1954. 

Suspension of Registration -- Denial of Trading Privileges -- Violations of 

Act -- Trading in Futures in Excess of Limits -- Concealment of Transactions -- 

Submitting False Reports -- Consent Order

Where a trader-respondent admitted that he traded in oats, wheat and corn 

futures in excess of limits established under the act and concealed such 

transactions by placing them in the accounts of others, and the other 

respondents, floor brokers, admitted that they aided in such concealment and 

submitted false reports, and upon respondents admission of jurisdictional facts, 

waiver of oral hearing and consent to the entry of an order, it is ordered, 

that, for certain specified periods, all respondents are refused trading 

privileges, and the registrations of the floor broker-respondents are suspended. 

Waiver of Hearing -- Stipulation of Parties -- Jurisdiction of Secretary -- 

Issuance of Order

Where respondents admitted transactions in commodities for future delivery 

which were capable of being used for hedging or determining price basis or 

delivering the commodity, held, such facts are sufficient to subject respondents 

to the jurisdiction of the Secretary, and their waiver of hearing should be 

accepted, and the order to which respondents have consented should be issued. 

Mr. Benj. M. Holstein for Commodity Exchange Authority. Mr. Mitchell Edelson,

of Chicago, Illinois, and Messrs. Clark M. Clifford and William H. Dorsey, Jr.,

of Clifford and Miller, of Washington, D. C., for respondent 

Edward R. Byer. Messrs. Johnston, Thompson, Raymond & Mayer, of Chicago, 

Illinois, for respondent Joel Starrels, James T. McKerr and Company, Mr. James 

T. McKerr, and Mr. Charles J. McKerr, of Chicago, Illinois, respondents, pro se. 

Mr. Arnold F. Shaw, of Donohue & Kaufmann, of Washington, D. C., for respondent 

Gilbert D. Mathy. Mr. G. Osmond Hyde, Referee. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is a quasi-judicial proceeding under the Commodity Exchange Act (7 

U.S.C., Chapter 1), instituted by a complaint and notice of hearing issued under 

section 6 (b) of the act (7 U.S.C. 9) on April 14, 1954, by the Secretary of 

Agriculture. The complaint charged that respondent Edward R. Byer traded in 
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oats, wheat, and corn futures in quantities which exceeded the speculative 

trading limits established under the act, that he concealed such excess trading 

by placing the transactions or causing them to be placed in accounts carried in 

the names of other persons, and that all the respondents aided in such 

concealment and variously, in furtherance thereof, submitted false reports to 

the Commodity Exchange Authority, falsified their books and records, failed to 

keep required records, and executed fictitious trades, in violation of sections 

4, 4a, 4b, 4c, 4g and 4i of the Commodity Exchange Act (7 U.S.C. 6, 6a, 6b, 6c, 

6g, 6i). Motions were filed on behalf of all the respondents to quash the 

complaint and dismiss the proceeding or, in the alternative, to require the 

complainant to make the complaint more specific or furnish a bill of 

particulars. At the same time, separate motions for severance were filed on 

behalf of all the respondents save Edward R. Byer. 

The motions to quash the complaint and dismiss the proceeding were certified 

to the Judicial Officer and denied by him in an order entered September 10, 1954 

(13 Agric. Dec. 873 (13 A.D. 873)). The motions to make the complaint more 

specific or for a bill of particulars and the motions for severance were denied 

by the referee on September 15, 1954. All the respondents filed exceptions and 

statements of objection to these rulings by the Judicial Officer and the 

referee. 

The respondents filed answers to the complaint on October 4, 1954. Each of 

the answers denied the material allegations of the complaint, denied any 

wrongdoing, realleged and reincorporated the previous motions to quash the 

complaint and dismiss the 

proceeding together with the reasons and arguments stated in support thereof, 

and contended that the proceeding was illegal, unwarranted, and unauthorized by 

law on grounds similar to or identical with those previously urged in support of 

the aforesaid motions, and for various other reasons. 

No hearing was held. On November 8, 1954, prior to the date finally set for 

hearing, each of the respondents (the McKerr respondents acting jointly) filed a 

document in which he withdrew the answer previously filed, admitted the facts 

contained herein under "Findings of Fact," waived hearing, and consented to the 

entry of the order hereinafter set forth. 

FINDINGS OF FACT

1. The Board of Trade of the City of Chicago, hereinafter called the Chicago 

Board of Trade, was at all times material herein a duly designated contract 

market under the Commodity Exchange Act. 

2. Respondent Edward R. Byer, an individual whose address is Box 269, Route 

2, Garland, Texas, is a trader in commodity futures. At all times material 

herein, the said Edward R. Byer was a non-clearing member of the Chicago Board 

of Trade. During the period from January 1952 to July 1953, both inclusive, the 

said Edward R. Byer held positions in and executed or caused the execution of 

transactions in commodities for future delivery on or subject to the rules of 

the Chicago Board of Trade. The said Edward R. Byer was not at any such time a 

registered futures commission merchant or registered floor broker under the 

Commodity Exchange Act, and all positions so held and transactions so executed 

were for his own account. 

3. Respondent Joel Starrels, an individual whose business address is Room 

1480, Board of Trade Building, 141 West Jackson Boulevard, Chicago 4, Illinois, 

is a trader in commodity futures. At all times material herein, the said Joel 

Starrels was a registered floor broker under the Commodity Exchange Act and a 

non-clearing member of the Chicago Board of Trade. During November and December 

1952, the said Joel Starrels executed or caused the execution of transactions in 

commodities for future delivery on or subject to the rules of the Chicago Board 

of Trade. 
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4. Respondent James T. McKerr and Company is a partnership composed of 

respondents James T. McKerr and Charles J. 

McKerr, and has offices at Room 1045, Board of Trade Building, 141 West Jackson 

Boulevard, Chicago 4, Illinois. At all times material herein, the said 

partnership was a registered futures commission merchant under the Commodity 

Exchange Act and a clearing member of the Chicago Board of Trade, and at all 

such times respondents James T. McKerr and Charles J. McKerr were registered 

floor brokers under the Commodity Exchange Act and members of the Chicago Board 

of Trade. During the period from January 1952 to July 1953, both inclusive, the 

said James T. McKerr and Company, James T. McKerr, and Charles J. McKerr 

executed or caused the execution of transactions in commodities for future 

delivery on or subject to the rules of the Chicago Board of Trade. 

5. Respondent Gilbert D. Mathy, an individual whose business address is Room 

1042, Board of Trade Building, 141 West Jackson Boulevard, Chicago 4, Illinois, 

is a trader in commodity futures. At all times material herein, the said 

Gilbert D. Mathy was a registered floor broker under the Commodity Exchange Act 

and a non-clearing member of the Chicago Board of Trade. During August 1952, 

the said Gilbert D. Mathy executed or caused the execution of transactions in 

commodities for future delivery on or subject to the rules of the Chicago Board 

of Trade. 

6. The transactions in commodities for future delivery described in these 

Findings of Fact were capable of being used for (1) hedging a transaction in 

interstate commerce in the particular commodity or in the products or byproducts thereof, or (2) determining the price basis of a transaction in 

interstate commerce in the particular commodity, or (3) delivering the 

particular commodity when sold, shipped, or received in interstate commerce. 

CONCLUSIONS

Section 0.4(b) of the Rules of Practice under the Commodity Exchange Act (17 

CFR 0.4(b)) provides as follows: 

(b) Consent order. At any time after the issuance of the complaint and prior 

to the hearing in any proceeding, the Secretary, in his discretion, may allow 

the respondent to consent to an order. In so consenting, the respondent must 

submit, for filing in the record, a stipulation or statement in which he admits 

at least those facts necessary to the Secretary's jurisdiction and agrees that 

an order may be 

entered against him. Upon a record composed of the complaint and the 

stipulation or agreement consenting to the order, the Secretary may enter the 

order consented to by the respondent, which shall have the same force and effect 

as an order made after oral hearings. 

The facts admitted by the respondents and set forth in the Findings of Fact 

are sufficient to subject them and each of them to the jurisdiction of the 

Secretary of Agriculture. The complainant has recommended that the waivers of 

hearing be accepted and that the orders to which the respondents have consented 

be issued. It is so concluded. 

ORDER

Effective January 10, 1955, all contract markets shall refuse all trading 

privileges to Edward R. Byer for a period of ninety (90) days, such refusal to 

apply to all trading done and positions held directly by the said Edward R. 

Byer, and also to all trading done and positions held indirectly through persons 

owned or controlled by him, or otherwise. 

Effective January 10, 1955, the registrations of James T. McKerr and Charles 

J. McKerr as floor brokers under the Commodity Exchange Act are suspended for a 
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period of ten (10) days. Effective on the same date and for the same period, 

all contract markets shall refuse to James T. McKerr and Charles J. McKerr all 

trading privileges, either for their own accounts or for the accounts of other 

persons, such refusal to apply to all trading done and positions held directly 

by the said James T. McKerr or Charles J. McKerr, and also to trading done and 

positions held indirectly through persons owned or controlled by them or either 

of them, or otherwise. 

Effective January 10, 1955, all contract markets shall refuse to James T. 

McKerr and Company all trading privileges for its own or house account for a 

period of ten (10) days, such refusal to apply to all trading done and positions 

held directly by the said James T. McKerr and Company, and also to all trading 

done and positions held indirectly through persons owned or controlled by the 

said firm, or otherwise, Provided, that such refusal shall not be construed to 

prohibit the execution of bona fide orders received by James T. McKerr and 

Company in its capacity as a registered futures commission merchant under the 

Commodity Exchange Act. 

Effective January 10, 1955, the registrations of Joel Starrels and Gilbert D. 

Mathy as floor brokers under the Commodity Exchange Act are suspended for a 

period of five (5) days. Effective on the same date and for the same period, 

all contract markets shall refuse to the said Joel Starrels and Gilbert D. Mathy 

all trading privileges, either for their own accounts or for the accounts of 

other persons, such refusal to apply to all trading done and positions held 

directly by the said Joel Starrels or Gilbert D. Mathy, and also to trading done 

and positions held indirectly through persons owned or controlled by the said 

Joel Starrels or Gilbert D. Mathy, or otherwise. 

A copy of this decision and order shall be served upon the parties by 

registered mail or in person and upon each contract market. 

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