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Commodity Futures Trading Commission 

CEA CASES 

NAME: JOHN M. COX 

CITATION: 33 Agric. Dec. 18 

DOCKET NUMBER: 216 

DATE: JANUARY 30, 1974 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 15,615) 

In re JOHN M. COX. CEA Docket No. 216. Decided January 30, 1974. 

Speculative trades -- exceeding maximum limit -- Failure to properly prepare 

trading cards -- Suspension

Where respondent violated the Act and regulations in connection with his 

floor broker operations in corn futures, respondent is suspended as a registrant 

under the Act for a period of 60 days. 

Richard W. Davis, for complainant. 

Robert P. Howington, Jr., Chicago, Ill., for respondent. 

Decision by John A. Campbell, Administrative Law Judge.

DECISION AND ORDER

PRELIMINARY STATEMENT

This is a disciplinary proceeding under Sections 6(b) and (c) of the 

Commodity Exchange Act (7 U.S.C. 9 and 13b), hereinafter referred to as the Act, 

instituted by a complaint and notice of hearing filed by the Assistant Secretary 

of Agriculture on October 2, 1973. 

The complaint alleges in substance that the respondent made speculative 

trades in corn futures in excess of the maximum limits established by the 

Commodity Exchange Commission and failed to properly prepare trading cards 

showing his purchases of corn futures thereby wilfully violating Sections 4a and 

4g of the Commodity Exchange Act (7 U.S.C. 6a and 6g), Section 150.11 of the 

orders of the Commodity Exchange Commission (17 CFR 150.11) and Section 1.35 of 

the regulations under the Commodity Exchange Act (17 CFR 1.35). 

The complaint was served upon the respondent by mail on October 4, 1973. 

Section 0.9(a) of the rules of practice (17 CFR 0.9(a)) provides in pertinent 

part: "Within 20 days after service of the complaint, the respondent shall file, 

in triplicate, with the hearing clerk, an answer . . . ." The letter of the 

Hearing Clerk, United States Department of Agriculture, which transmitted the 

complaint, notified the respondent "You will have twenty days from the receipt 

of this letter within which to file with the Hearing Clerk an original and three 

copies of your answer." No answer has been filed. 

This decision is issued in accordance with the provisions of 

Section 0.9 of the rules of practice under the Commodity Exchange Act (38 F.R. 

22381). n1 

n1. On November 12, 1973, complainant filed a motion to adopt, pursuant 

to 17 CFR 0.9, a proposed decision which was filed with the motion. The 
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motion, together with the proposed decision, were served upon respondent in 

the manner provided in 17 CFR 0.22. 

On December 7, 1973, respondent, by his attorney, filed a response to 

complainant's motion which states in part that respondent "neither objects 

to nor acquiescences in the motion and proposed decision but reserves any 

rights which he may have to appeal any decision or Order entered herein." 

Since this response does not constitute an answer as contemplated by 

Section 0.9 of the Rules of Practice under the Act the matter was referred 

to the undersigned Administrative Law Judge for issuance of a decision 

without further procedure or hearing. 

FINDINGS OF FACT

1. The respondent, John M. Cox, an individual whose business address is c/o 

A. J. Riffel and Co., 141 West Jackson Boulevard, Room 1040, Chicago, Illinois 

60604, is now and was at all times material herein, a member of the Chicago 

Board of Trade and a registered floor broker under the Act. 

2. The Chicago Board of Trade, 141 West Jackson Boulevard, Chicago, Illinois 

60604, is now and was at all times material herein a duly designated contract 

market under the Act. 

3. The transactions referred to herein relate to the purchase and sale of 

corn futures contracts on the Chicago Board of Trade. Such contracts could have 

been used for hedging transactions in interstate commerce in corn or the 

products or byproducts thereof, or for determining the price basis of 

transactions in interstate commerce in corn, or for delivering corn sold, 

shipped, or received in interstate commerce. 

4. On or about May 21, 1973, the respondent made speculative trades for his 

own account in corn futures on the Chicago Board of Trade, which were in excess 

of the maximum permissible limits established by the order of the Commodity 

Exchange Commission (17 CFR 150.11), as follows: 

In Bushels 

Future Purchases Sales 

May 795,000 545,000

July 3,455,000 4,015,000

December 1,490,000 1,255,000

 Total 5,740,000 5,815,000 

5. On or about May 21, 1973, respondent failed to properly prepare trading 

cards showing his purchases and sales of corn for future delivery. Respondent 

failed, on every such card, to show the commodity traded; failed, on many cards, 

to show the identity of the opposite floor broker; and failed, on some cards, to 

show the identity of the opposite clearing firm. 

6. The order of the Commodity Exchange Commission (17 CFR 150.11) provides in 

pertinent part: "(b) Daily trading limit. The limit on the maximum amount which 

any person may buy, and on the maximum amount which any person may sell, of 

corn, on or subject to the rules of any one contract market during any one 

business day is 3,000,000 bushels in any one future or in all futures combined." 

This order was promulgated under the provisions of Section 4a of the Act (7 

U.S.C. 6a). 

7. Section 1.35 of the regulations under the Commodity Exchange Act provides 

in pertinent part "(d) Members of contract markets: Each member of a contract 

market who, in the place provided by the contract market for the meeting of 

persons similarly engaged, executes purchases or sales of any commodity for 

future delivery on or subject to the rules of such contract market, shall 

prepare regularly and promptly a trading card or other record showing such 

purchases and sales. Such trading card or record shall show his own name, the 

name of the member firm clearing the trade, the date, price, quantity, commodity 

and future, and shall clearly identify the opposite floor broker or floor trader 

with whom such transaction was executed, and the opposite clearing member (if, 
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in accordance with the rules or practice of the contract market such opposite 

clearing member is made known to him)." This regulation was promulgated under 

the authority of Section 4g of the Act (7 U.S.C. 6g). 

CONCLUSIONS

The facts admitted by the respondent by his failure to answer the complaint 

clearly show that he wilfully violated Section 4a of the Act (7 U.S.C. 6a) and 

Section 150.11 of the orders of the Commodity Exchange Commission (17 CFR 

150.11) by exceeding the maximum permissible daily trading limits by nearly 3 

million bushels, and wilfully violated Section 4g of the Act (7 U.S.C. 6g) and 

Section 1.35 of the regulations under the Commodity Exchange Act (17 CFR 1.35) 

by failing to record required information on each and every trading card he 

prepared on May 21, 1973 for purchases and sales of nearly 6 million bushels of 

corn. 

Accordingly, it is concluded that the following order is proper and should be 

issued in the circumstances. 

ORDER

1. Effective immediately, respondent John M. Cox, shall cease and desist from 

making speculative trades in futures which are in excess of the maximum 

permissible limits established by the orders of the Commodity Exchange 

Commission. 

2. Effective on the 30th day after the date this order becomes final, 

respondent John M. Cox is prohibited from trading in any commodity on any 

contract market for 60 days and all contract markets shall deny trading 

privileges to the said respondent for that period. Such prohibition and denial 

shall apply to all trading done and positions held directly by the said 

respondent, either for his own account, or as the agent or representative of any 

other person or firm, and also to all trading done and positions held indirectly 

through persons or firms owned or controlled by the said respondent, or 

otherwise. 

3. Effective on the 30th day after the date this order becomes final, the 

registration of respondent John M. Cox as a floor broker is suspended for 60 

days. * 

4. Pursuant to the amended rules of practice governing proceedings under the 

Commodity Exchange Act, this decision and order become final without further 

procedure 35 days after service hereof, unless appealed to the Secretary by a 

party to the proceedings within 30 days after service, as provided in Section 

0.16 and Section 0.18 of the amended rules of practice published in the Federal 

Register of August 20, 1973, (38 F.R. 22381). 

5. A copy of this decision and order shall be served on each of the parties 

and on each contract market. 

* The Decision and Order became final January 30, 1974. -- Ed. 

 

 

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