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Commodity Futures Trading Commission 

CEA CASES 

NAME: J. MORONI STOOF AND M-S COMMODITIES, INC. 

CITATION: 31 Agric. Dec. 1358 

DOCKET NUMBER: 187 

DATE: NOVEMBER 3, 1972 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 14,845) 

In re J. MORONI STOOF and M-S COMMODITIES, INC. CEA Docket No. 187. Decided 

November 3, 1972. 

Customers' funds -- Conversion and commingling of -- Undersegregation of -- 

Stipulation -- Cease and desist as to M-S -- Dismissed as to Stoof

Where the stipulation of M-S Commodities, Inc. has been accepted, said 

respondent is ordered to cease and desist from violating the Act and regulations 

as found herein. The proceeding is dismissed as to respondent J. Moroni Stoof. 

Darrold A. Dandy, for complainant. 

W. Brent Wilcox, Salt Lake City, Utah, for respondent J. Moroni Stoof. 

L. W. Alberts, Chicago, Illinois, for respondent M-S Commodities, Inc. 

Decision by Donald A. Campbell, Judicial Officer 

DECISION AND ORDER

PRELIMINARY STATEMENT

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

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

November 17, 1971. It is alleged in the complaint that respondent J. Moroni 

Stoof, while co-manager of the Salt Lake City, Utah, branch office of respondent 

M-S Commodities, Inc., converted to his own use funds totaling approximately $ 

50,000 which has been received by respondent M-S Commodities, Inc., from its 

customers to margin their transactions in commodities for future delivery, or 

accrued to such customers as the result of such transactions; and that as a 

result of such conversion and the commingling by the respondent corporation of 

the trades and funds pertaining thereto, of respondent Stoof with those of 

ordinary customers of the firm, the respondent corporation was under-segregated, 

that is, the total amount of customers' funds held in segregation was 

insufficient to pay all credits and equities due to such customers. 

On the basis of such allegations, it is charged in the complaint that 

respondent J. Moroni Stoof violated sections 4b and 9 of the Commodity Exchange 

Act (7 U.S.C. 6b and 13), and respondents Stoof and M-S Commodities, Inc., 

violated section 4d of the Act and sections 1.20, 1.21, and 1.22 of the 

regulations thereunder (17 CFR 1.20, 1.21, and 1.22). 

No hearing has been held in this proceeding. Respondent M-S Commodities, 

Inc., has filed a stipulation under section 0.4(b) of the rules of practice (17 

CFR 0.4(b)) in which it (1) withdraws its answer previously filed, (2) admits 

the facts hereinafter set forth in paragraphs 1 through 3 of the Findings of 

Fact, (3) admits for the purposes of this proceeding and for such purposes only 

the facts hereinafter set forth in paragraph 4 of the Findings of Fact, (4) 
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waives the report of the Referee and (5) consents to the entry of a specified 

order. 

Respondent J. Moroni Stoof is presently serving a six-year sentence in 

federal prison which began in December, 1971. The Commodity Exchange Authority 

does not feel that any useful purpose could be served by continuing this 

proceeding against respondent Stoof and recommends that it be dismissed as to 

him. 

FINDINGS OF FACT

1. Respondent J. Moroni Stoof was, during the relevant period of this case, 

co-manager of the Salt Lake City, Utah, branch office of respondent M-S 

Commodities. 

2. Respondent M-S Commodities, Inc., a corporation with its principal offices 

at 110 North Franklin Street, Chicago, Illinois, is now, and was at all times 

material herein, a registered futures commission merchant under the Commodity 

Exchange Act. 

3. At all times herein specified, respondent M-S Commodities, Inc., in 

connection with its business as a futures commission merchant, 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. Such funds represented 

deposits by customers to margin their transactions in commodities for future 

delivery, or funds accrued to such customers as the result of such transactions. 

4. The respondent corporation was under-segregated in the amounts of $ 

4,223.70 and $ 37,448.50 on March 15 and 17, 1971, respectively, that is, the 

total amount of customers' funds held in segregation was insufficient, by the 

aforesaid sums, to pay all credits and equities due to such customers. 

CONCLUSIONS

By reason of the facts set forth in the Findings of Fact, it is concluded 

that, as charged in the complaint, the respondent M-S Commodities, Inc., 

violated section 4d of the Commodity Exchange Act (7 U.S.C. 6d) and sections 

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

The administrative officials of the Commodity Exchange Authority state that 

according to its investigation in this matter, the respondent corporation's 

undersegregated condition originated in respondent Stoof's conversion of 

customers' funds. This was made possible by the commingling of trades and funds 

of respondent Stoof with those of ordinary customers of respondent M-S 

Commodities, Inc. In the circumstances, the administrative officials believe 

that the prompt entry of the proposed order, to which the respondent M-S 

Commodities, Inc., has consented, and the dismissal of this case as to the 

respondent Stoof would constitute a satisfactory disposition of this case, serve 

the public interest and effectuate the purposes of the Act. The complainant 

recommends that the stipulation be accepted, the proposed order be issued, and 

the 

proceeding be dismissed insofar as it relates to respondent Stoof. It is 

concluded that the complainant's recommendation should be adopted. 

ORDER

Effective upon the date of service of this order upon the respondent M-S 

Commodities, Inc., it shall cease and desist from failing to treat and deal with 

customers' funds as belonging to such customers as required by section 4d of the 

Commodity Exchange Act (7 U.S.C. 6f) and the regulations thereunder. 

The proceeding is dismissed insofar as it relates to respondent J. Moroni 

Stoof. 

A copy of this Decision and Order shall be served on each of the parties. 
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