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Commodity Futures Trading Commission 

CEA CASES 

NAME: MILROSE BROKERAGE CO., INC., AND MILTON E. ROSENBERG 

DOCKET NUMBER: 145 

DATE: JANUARY 24, 1967 

DOCUMENT TYPE: COMPLAINT 

DEPARTMENT OF AGRICULTURE 

WASHINGTON, D.C. 20250 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Milrose Brokerage Co., Inc., and Milton E. Rosenberg, Respondents 

CEA Docket No. 145 

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

Act 

There is reason to believe that the respondents named herein have violated 

the Commodity Exchange Act (7 U.S.C. 1 et seq.), and the rules and regulations 

made pursuant thereto (17 CFR, Part I), and in accordance with the provisions of 

section 6(b) of the said act (7 U.S.C. 9), this complaint and notice of hearing 

is issued alleging as follows: 

I 

Respondent Milrose Brokerage Co., Inc., a Pennsylvania corporation with 

offices at 2033 Penn Avenue, Pittsburgh, Pennsylvania, is now, and was at all 

times material herein, registered as a futures commission merchant under the 

Commodity Exchange Act. 

II 

Respondent Milton E. Rosenberg, an individual whose address is 552 North 

Neville Street, Pittsburgh, Pennsylvania, is now, and was at all times material 

herein, the president of the respondent 

corporation and its principal stockholder. At all such times, respondent Milton 

E. Rosenberg conducted, managed and controlled the affairs of the corporation as 

his own business. The operations of the corporation, hereinafter described, 

were ordered and directed or carried out by respondent Milton E. Rosenberg. 

III 

At the times hereinafter stated, the respondent corporation, in the regular 

course of its business as futures commission merchant, carried accounts for 

customers who traded in commodity futures. Such accounts, the trading therein, 

and the handling and disposition of funds in connection therewith, were subject 

to the provisions of the Commodity Exchange Act and the rules and regulations 

issued thereunder. At all such times, the respondent corporation had to its 

credit with a bank or other depository, sums of money in varying amounts, held 

in segregated account and identified as customers' funds, representing deposits 

of margin by and trading profits accruing to such customers. 

IV 
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On 51 business days during the period from June 22, 1966, through September 

6, 1966, the respondent corporation was under-segregated in amounts ranging from 

$ 265.50 on June 22 to $ 4,515.50 on June 29 -- that is, on the 51 days 

mentioned the total amount of customers' funds held 

in segregation by the respondent corporation, as described in paragraph III 

hereof, was from $ 265.50 to $ 4,515.50 less than the amount necessary to pay 

all credits and equities due to such customers. 

V 

On 13 business days during the period from June 22, 1966, through July 11, 

1966, and on 11 business days during the period from July 26, 1966, through 

August 9, 1966, the respondent corporation purchased and sold commodity futures 

for the use and benefit of certain customers and margined, guaranteed, or 

secured such purchases and sales with funds belonging to other customers of the 

respondent corporation. The funds so used ranged from $ 254.25 on July 8, 1966, 

to $ 2,406.25 on June 29, 1966. 

VI 

On 46 business days during the period from July 1, 1966, through September 6, 

1966, the respondent corporation failed to prepare and maintain a daily 

segregation record setting forth the amount of money, securities and property of 

customers required to be kept in segregation, and during the months of June, 

July and August 1966, no monthly statements or accountings were sent to its 

customers. 

VII 

In June 1966 and prior to the acts and omissions described above, an 

examination of the books and records of the respondent corporation by the 

Commodity Exchange Authority disclosed that during the period from October 4, 

1965, through March 6, 1966, the respondent corporation had not prepared a daily 

record of customers' funds required to be held in segregation, and that during 

the period from March 7, 1966, through June 6, 1966, the respondent corporation 

had become under-segregated on all but seven days. Representatives of the 

Commodity Exchange Authority informed respondent Milton E. Rosenberg that these 

matters constituted violations of the Commodity Exchange Act and regulations, 

and the said respondent promised the representatives of the Commodity Exchange 

Authority that necessary corrective measures would be taken and that such 

violations would not be repeated. 

VIII 

By reason of the facts alleged in this complaint, the respondents failed to 

treat and deal with customers' funds as belonging to such customers, failed to 

segregate and account separately for such funds, used funds to margin and 

guarantee the trades and secure and extend the credit of persons other than 

those for whom the same were held, failed to prepare and maintain or cause the 

preparation and maintenance of the records required under the Commodity Exchange 

Act and 

regulations as a basis for such segregation and accounting, and failed to send 

customers required statements, in knowing and wilful violation of sections 4d 

and 4g of the Commodity Exchange Act (7 U.S.C. 6d, 6g), and sections 1.20, 1.21, 

1.22, 1.32 and 1.33 of the regulations (17 CFR 1.20, 1.21, 1.22, 1.32, 1.33). 

WHEREFORE, it is hereby ordered that this complaint and notice of hearing be 

served upon the said respondents. The respondents will have twenty (20) days 

after the receipt of this complaint in which to file with the Hearing Clerk, 

United States Department of Agriculture, Washington, D. C. 20250, an answer with 
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an original and five copies, fully and completely stating the nature of the 

defense and admitting or denying, specifically and in detail, each allegation of 

this complaint. Allegations not answered will be deemed admitted for the 

purposes of this proceeding. Failure to file an answer will constitute an 

admission of all the allegations of this complaint and a waiver of hearing. The 

filing of an answer in which all of the material allegations of fact contained 

in the complaint are admitted likewise shall constitute a waiver of hearing 

unless a hearing is requested. The respondents are hereby notified that unless 

hearing is waived, a hearing will be held at 10:00 a.m., local time, on February 

28, 1967, in Pittsburgh, Pennsylvania, at a place therein to be specified later, 

before a referee designated to 

conduct such hearing. At such hearing, the respondents will have the right to 

appear and show cause, if any there be, why an order should not be made 

suspending or revoking the registration of respondent Milrose Brokerage Co., 

Inc., as futures commission merchant, and directing that all contract markets 

refuse all trading privileges to each respondent for such period of time as may 

be determined. 

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

the said respondents at least twenty (20) days prior to the date set for 

hearing. 

Done at Washington, D. C. 

January 24, 1967. 

[SEE SIGNATURE IN ORIGINAL] 

Assistant Secretary 

George L. Mehren 

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