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Commodity Futures Trading Commission 

CEA CASES 

NAME: HENRY H. CATE, JOHN J. BUTERIN, AND E. F. HUTTON & COMPANY 

CITATION: 18 Agric. Dec. 884 

DOCKET NUMBER: 90 

DATE: AUGUST 4, 1959 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 6069) 

In re HENRY H. CATE, JOHN J. BUTERIN, AND E. F. HUTTON & COMPANY. CEA Docket 

No. 90. Decided August 4, 1959. 

Stipulation -- Consent Order

Respondent E. F. Hutton & Company consented to the issuance of an order 

providing that if this respondent should be found to have violated the act 

within one year from the date of this order, a supplemental order may be issued 

suspending its registration as a futures commission merchant for a 30-day 

period. 

Mr. Benj. M. Holstein, for Commodity Exchange Authority. Respondent E. F. 

Hutton & Company pro se. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is a disciplinary proceeding under the Commodity Exchange Act (7 U.S.C. 

1958 ed., Chapter 1), instituted by a complaint and notice of hearing under 

section 6(b) of the Commodity Exchange Act (7 U.S.C. 1958 ed., § 9), issued by 

the Assistant Secretary of Agriculture on July 30, 1959. 

Respondent E. F. Hutton & Company, a partnership with offices in New York and 

Kansas City, Missouri, is one of three respondents in this proceeding. The 

individual respondents, Henry H. Cate and John J. Buterin, are employed in the 

Kansas City office of E. F. Hutton & Company. 

The complaint charges that respondents Cate and Buterin attempted to 

manipulate and did manipulate prices of the March and May 1959 wheat futures on 

the Chicago Board of Trade, and attempted to deceive and did deceive customers 

in regard to orders for or transactions in such futures. These charges are 

based upon allegations that the individual respondents initiated, managed, and 

carried out transactions in March and May 1959 wheat futures on behalf of 

customers of respondent E. F. Hutton & Company, for the purpose and with the 

intent of raising the prices of such futures by means of a squeeze; that this 

was sought to be accomplished by concentrating, in the hands of such customers, 

a quantity of the current wheat future sufficient to constitute the major 

portion of the open interest in such future and to exceed available deliverable 

supplies of wheat; that pursuant to such purpose and intent respondents Cate and 

Buterin encouraged, recommended, solicited, and accepted orders 

for transactions in futures which they caused to be executed through the 

facilities of respondent E. F. Hutton & Company; that respondents Cate and 

Buterin urged such customers to retain their long positions and accept delivery 

of wheat upon the assurance that the futures in question were controlled by the 
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concentrated long position of such customers on respondent Hutton's books, and 

that the cash wheat supply in Chicago was also under such control. 

The complaint alleges further that respondents Cate and Buterin ignored 

customers' instructions to liquidate positions and sell cash wheat; failed to 

execute orders to sell futures and re-tender wheat received on delivery; and 

caused the execution of transactions not ordered by such customers. It is 

alleged that the transactions described were carried out under the direction and 

supervision of respondents Cate and Buterin, and that these transactions brought 

about a squeeze and caused the prices of March and May 1959 wheat futures to be 

at artificial and manipulated levels during March 1959. 

The complaint also charges respondent E. F. Hutton & Company with attempted 

and actual manipulation of the prices of such futures. The charge against 

Hutton is based upon allegations that it was the employer of the individual 

respondents, executed the transactions in question and carried the resulting 

positions on its books, financed the wheat taken on delivery, and was able at 

all times to control, change, and direct the acts of the individual respondents 

insofar as they pertained to the transactions in question. 

The complaint does not charge respondent Hutton with actual or attempted 

deceit of customers. 

No hearing has been held with respect to any of the respondents. On August 

3, 1959, respondent E. F. Hutton & Company submitted a stipulation under section 

0.4 (b) of the rules of practice (17 FR 0.4(b)). This stipulation admits 

jurisdictional facts, waives hearing, and consents to the entry of an order 

which would provide that if, after complaint, notice and hearing, in accordance 

with established procedure, respondent E. F. Hutton & Company should be found to 

have violated the Commodity Exchange Act within one year from the date of entry 

of the order, the Secretary could, without further notice, issue a supplemental 

order in this proceeding suspending the said respondent's registration as a 

futures commission merchant for a period of thirty days. 

FINDINGS OF FACT

1. Respondent E. F. Hutton & Company is a partnership with offices at 61 

Broadway, New York 6, New York, and 111 West 10th Street, Kansas City, Missouri. 

The said respondent is now and has been at all times material herein a clearing 

member of the Chicago Board of Trade and a registered futures commission 

merchant under the Commodity Exchange Act. 

2. The Chicago Board of Trade is now and has been at all times material 

herein a duly designated contract market under the Commodity Exchange Act. 

3. During the period from December 1958 through April 1959, respondent E. F. 

Hutton & Company, in its capacity as a registered futures commission merchant, 

traded in wheat futures on the Chicago Board of Trade for the accounts of 

customers and carried the resulting positions on its books and records. 

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. 
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The facts admitted by the said respondent and set forth in the Findings of 

Fact are sufficient to subject it to the jurisdiction of the Secretary of 

Agriculture. 

The complainant has filed a recommendation which recites that it has 

carefully considered the stipulation and the terms of the order to which the 

said respondent proposes to consent. The complainant refers to respondent 

Hutton's representations in the stipulation that the firm did no trading for its 

own account in connection with the transactions in question, that it cooperated 

fully with the Commodity Exchange Authority in the investigation of the matters 

alleged in the complaint, and that it has attempted and is attempting to make 

appropriate settlement of all legitimate claims of loss by customers based upon 

the matters alleged in the complaint. The complainant states that these 

representations have been found to be correct, and that they constitute 

mitigating circumstances which, in the complainant's opinion, warrant acceptance 

of the stipulation. 

The complainant feels that the proposed sanction would be adequate, and that 

the prompt entry of the proposed order without further proceedings would 

constitute a satisfactory disposition of this case as against the said 

respondent, serve the public interest, and effectuate the purpose of the 

Commodity Exchange Act. The complainant therefore recommends that the 

stipulation and waiver be accepted and that the proposed order be issued. It is 

so concluded. 

ORDER

It is hereby ordered that if, after complaint, notice and hearing, in 

accordance with established procedure, respondent E. F. Hutton & Company should 

be found to have violated the Commodity Exchange Act within one year from the 

date of entry of this order, the Secretary of Agriculture may, without further 

notice to respondent E. F. Hutton & Company, issue a supplemental order to this 

proceeding suspending the said respondent's registration as a future commission 

merchant for a period of thirty (30) days. 

A copy of this decision and order shall be served upon the said respondent 

and upon each contract market. 

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