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Commodity Futures Trading Commission 

CEA CASES 

NAME: SECRETARY OF AGRICULTURE V. PARIS G. HUGHES 

DOCKET NUMBER: 13 

DATE: OCTOBER 25, 1939 

DOCUMENT TYPE: DECISION AND ORDER 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

C.E.A. DOCKET NO. 13 

Secretary of Agriculture, Complainant, v. Paris G. Hughes, Respondent. 

Proceedings, Findings of Fact, Conclusions, and Order. 

PROCEEDINGS 

On July 13, 1939, complaint was issued by the Acting Secretary of 

Agriculture, pursuant to the provisions of the Commodity Exchange Act (7 U.S.C., 

1934 ed. and Supp. IV, Secs. 1-17a), against Paris G. Hughes, alleging that he 

is an individual trading as Hughes and Company at Great Falls, Montana, and has 

been registered as a futures commission merchant since June 1, 1938. It is 

charged that, between that date and April 30, 1939, in connection with commodity 

futures contracts on the Chicago Board of Trade, he failed to keep records 

required by the act and the rules and regulations thereunder; cheated, falsely 

reported to, and deceived customers by reporting that their orders had been 

executed through members of contract markets, and the prices at which they were 

executed, when they were not in fact so executed; bucketed orders, by confirming 

their 

execution through members of contract markets when they were not executed but 

were held for his own account; conducted a place of business for commodity 

futures contracts and consummated such contracts other than through a member of 

a contract market; and communicated, in interstate commerce or through the 

mails, confirmations and reports of contracts subject to the rules of a contract 

market when such contracts were not executed by or through a member of a 

contract market. Respondent was directed to show why his registration should 

not be revoked and trading privileges on contract markets denied him, at a 

hearing in Washington, D. C., on July 26, 1939. 

The complaint was served on the respondent by registered mail, together with 

a letter from the Solicitor advising the respondent that he might request a 

hearing at Great Falls, or elsewhere, if he desired to submit evidence and was 

unable to come to Washington. The hearing date was postponed to July 31. 

Respondent, through R. J. Reynolds, his attorney, filed an answer stating that 

he had "returned his license" on April 25, 1939, and had closed his business as 

a futures commission merchant, after fully liquidating his accounts as such. It 

is alleged that if his records were inaccurate or incomplete, they were not 

intentionally so. Cheating, misrepresenting, and defrauding are denied. 

Bucketing, without the agreement, knowledge, and consent of his customers, is 

denied. The answer further denies respondent's conducting a place of business 

for, confirming, and reporting contracts not executed through contract market 
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members. Cancellation of his "license" is not objected to, but it is asked that 

this will not be to his disadvantage if he seeks a "new license" in the future. 

The referee by letter advised respondent's attorney that future registration 

might be refused if the present registration is revoked, that trading privileges 

on contract markets might be denied in this proceeding, and that, to avoid any 

possible misunderstanding, the hearing was postponed until August 18, 1939. 

The hearing was held in Washington, D. C., before Jack W. Bain, the referee, 

on August 18, 1939. Charles W. Bucy, Esq., Office of the Solicitor, Department 

of Agriculture, appeared for the Government. There was no appearance for the 

respondent. John J. Bachmann, in charge of the Division of Record Examination, 

Commodity Exchange Administration, Department of Agriculture, called by the 

Government, was the only witness. He produced the official report, containing 

work papers, of an examination of the respondent's records, made under Mr. 

Bachmann's direction by Clarence D. Cook, an accountant for the Commodity 

Exchange 

Administration, in May 1939. This report shows that of all transactions for 

customers in Chicago wheat futures during the period concerned, the respondent 

executed only about half of them through members of contract markets, leaving 

the others open and unexecuted on contract markets. 

After the close of the hearing, the referee's report, proposed findings of 

fact and conclusions, and recommended order were sent by registered mail to 

respondent's attorney and were delivered to him on September 8, 1939. Twenty 

days were given for filing exceptions, briefs, and requests for oral argument. 

None was filed. 

FINDINGS OF FACT 

1. Paris G. Hughes, the respondent, is an individual doing business as Hughes 

and Company at Great Falls, Montana. He is, and has been since June 1, 1938, 

registered with the Secretary of Agriculture as a futures commission merchant, 

pursuant to the provisions of the Commodity Exchange Act. 

2. From June 1, 1938, until April 30, 1939, the respondent was a 

correspondent of Louis N. Ritten and Company, of Winthrop, Mitchell and Company, 

and of Moore, McLean and McDermott, which three firms were and are members of 

contract markets. 

3. From June 1, 1938, until about April 30, 1939, the respondent conducted a 

place of business at 9 Third Street 

North, Great Falls, Montana, for conducting dealings in wheat and other 

commodities for future delivery, many of which dealings were consummated 

otherwise than through a member of a contract market. 

4. Between June 1, 1938, and April 30, 1939, the respondent bucketed nearly 

half of his customers' orders to make contracts of sale of wheat for future 

delivery subject to the rules of the Chicago Board of Trade, a contract market. 

5. Each of the dealings and contracts in futures in wheat and other 

commodities, mentioned in the two preceding paragraphs, could be used for 

hedging, and for fixing a price basis for, interstate transactions in the 

commodity involved. 

CONCLUSIONS 

It appears from the record in this proceeding that the activities of the 

respondent, with respect to his commodity futures business, wore largely in the 

nature of the operation of a bucket shop. It is concluded, therefore, that his 

registration as futures commission merchant should be revoked and his trading 

privileges on contract markets should be denied. 
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ORDER 

IT IS ORDERED that the registration of Paris G. Hughes as futures commission 

merchant for the period ending December 

31, 1939, be, and it is hereby, revoked. 

IT IS FURTHER ORDERED that all contract markets, until further notice by the 

Secretary of Agriculture, refuse all trading privileges thereon to Paris G. 

Hughes. 

IT IS FURTHER ORDERED that a copy hereof be sent by registered mail to the 

respondent and a copy sent to each contract market, and that this order shall be 

effective 10 days after the date hereof. 

(SEAL) 

Done at Washington, D. C., this 25th day of October, 1939. Witness my hand 

and the seal of the Department of Agriculture. 

(signed) Harry L. Brown. 

Assistant Secretary of Agriculture. 

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