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Commodity Futures Trading Commission 

CEA CASES 

NAME: SECRETARY OF AGRICULTURE V. PAUL A. NELSON 

DOCKET NUMBER: 29 

DATE: JUNE 13, 1941 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

CE-A Docket No. 29 

Secretary of Agriculture, Complainant, v. Paul A. Nelson, Respondent. 

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

Act. 

There being reason to believe that the respondent has violated the Commodity 

Exchange Act (7 U. S. C. and Supp. V, §§ 1-17a), and the rules and regulations 

promulgated pursuant thereto, this complaint is issued alleging the following: 

1. 

Paul A. Nelson is an individual trading and doing business at Chicago, 

Illinois. 

2. 

Paul A. Nelson, during the period from September 13, 1937, to May 7, 1940, 

acted as a floor broker in executing orders for the purchase or sale of grains 

for future delivery on and subject to the rules of the Board of Trade of the 

City of Chicago, a contract market designated by the Secretary of Agriculture 

under the provisions of the Commodity Exchange Act, without having registered 

under the Commodity 

Exchange Act with the Secretary of Agriculture as a floor broker. 

3. 

The respondent, during the month of February 1940, offered to enter into, 

entered into, and confirmed the execution of transactions involving wheat which 

were or could be used for hedging transactions in interstate commerce in wheat, 

and determining the price basis of wheat in interstate commerce. These 

transactions are more fully set forth in a tabulation, marked Exhibit A, 

attached hereto and made a part hereof. 

4. 

The transactions set forth in Exhibit A were of the character of and commonly 

known to the trade as "cross-trades"; the brokers with whom the respondent 

executed these trades, listed in the 7th column of Exhibit A, simultaneously 

bought and sold, at the same price, the contracts for the future delivery of 

wheat listed on Exhibit A, all in violation of Section 4c(A) of the Commodity 

Exchange Act. 

5. 

The respondent, by and through the means of intermediate cross-trades, 

willfully and knowingly, and without the prior consent of Fenner & Beane, the 

customer for whom the trades listed on Exhibit A were executed, became the buyer 
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with respect to selling orders, and the seller with respect to buying orders, on 

the dates listed on Exhibit A, in violation of Section 4b(D) of the Commodity 

Exchange Act. 

6. 

The respondent registered with the Secretary of Agriculture as a floor broker 

under the Commodity Exchange Act on May 8, 1940, and has been so registered 

continuously since that date. 

THEREFORE, the respondent is hereby notified, unless a hearing is waived, to 

be and appear before a referee appointed by the Secretary of Agriculture at a 

hearing to be held at 10 a. m. on June 26, 1941, in the offices of the Commodity 

Exchange Administration, Board of Trade Building, Chicago, Illinois, or at such 

other times and places as may be determined by the referee, and then and there 

show cause, if any there be, why an order should not be made suspending or 

revoking the respondent's registration as floor broker and directing that all 

contract markets, until further notice of the Secretary of Agriculture, refuse 

all trading privileges to the respondent. 

IT IS ORDERED that the respondent shall, within fifteen days after receipt of 

this complaint, file an answer with the hearing clerk, Office of the Solicitor, 

Department of Agriculture, Washington, D. C., as follows: 

(a) If the respondent desires to contest the proceeding, the answer shall 

contain a statement of the facts which constitute the ground of defense and 

shall admit, deny, or explain each of the facts alleged in the complaint, unless 

the respondent is 

without knowledge as to any alleged fact, in which case the answer shall so 

state. 

(b) If the respondent desires to waive hearing on the charges set forth in 

the complaint and not to contest the proceeding, the answer may consist of a 

statement that the respondent admits all the material allegations of the 

complaint to be true, and such answer shall be deemed to waive a hearing thereon 

and to authorize the Secretary of Agriculture, without hearing and without 

further evidence or other intervening procedure, to issue an order directing 

that all contract markets refuse all trading privileges to the respondent for 

such time as may be fixed by the order and revoking the respondent's 

registration as a floor broker. 

(c) If the respondent desires to waive hearing on the charges set forth in 

the complaint, but desires to contest the proceeding on the ground that the 

facts alleged do not constitute a violation of the Commodity Exchange Act, or do 

not warrant disciplinary action by the Secretary of Agriculture, the answer may 

consist of a statement that the respondent admits all the material allegations 

of the complaint to be true and that he waives hearing, but desires to be given 

an opportunity to submit argument in support of his contention. 

In such case, the respondent shall be served with a tentative order 

containing findings of fact, conclusions, and order, to which he shall be given 

an opportunity to file exceptions and briefs in support thereof, and, upon 

request, to make oral argument. 

Failure of the respondent to file an answer within the time above provided, 

and failure to appear at the time and place fixed for hearing, shall be deemed 

to authorize, without further hearing, notice to the respondent or other formal 

procedure, the admission and consideration, as part of the record, of reports of 

employees of the Department of Agriculture and other documents upon which the 

complaint is based, and the issuance of an order based on such record. 

IT IS FURTHER ORDERED that this complaint and notice of hearing be served on 

the named respondent by delivery of a true and correct copy hereof to the 
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respondent, by an employee of the Department of Agriculture or by registered 

mail. 

Done at Washington, D. C., this 13th day of June 1941. Witness my hand and 

the seal of the Department of Agriculture. 

(SEAL) 

/s/ Paul H. Appleby 

Under Secretary of Agriculture. 

TRANSACTION IN 1940 JULY THAT FUTURES ON THE CHICAGO BOARD OF TRADE 

EXECUTED BY PAUL A. NELSON FOR FENNER & BEANE, IN WHICH NELSON 

BECAME THE BUYER IN RESPECT TO SELLING ORDERS AND THE SELLER IN INSPECT TO 

BUYING ORDERS 

BY MEANS OF INTERMEDIATE CROSS TRADES MADE WITH OTHER ROM TRADERS>100> >101> 

An error occurred in the processing of a table at this point in the document. 

Please refer to the table in the online document. 

Floor Trader 

Item Making Intermediate

No. Date Cross Trade 

1940 

1 Feb. 1 P. J. Barrett

2 3 " "

3 3 M. T. McDonough

4 8 M. Weis

5 8 " "

6 8 " "

7 9 " "

8 9 " "

9 10 " "

10 10 " "

11 10 " "

12 10 J. E. Griffin

13 16 M. Weis

14 16 P. J. Barrett

15 17 " "

16 17 " "

17 17 F. Spinney

18 17 M. Weis

19 19 " "

20 20 W. F. Melican

21 20 M. T. McDonough

22 20 " "

23 20 " "

24 20 " "

25 20 " "

26 20 " "

27 20 M. Weis

28 20 " "

29 20 " "

30 21 " "

31 21 " "

32 21 P. J. Barrett

33 21 M. T. McDonough

34 21 J. E. Griffin

35 21 " "

36 21 " "

37 21 " "

38 23 " "

39 23 " "

40 23 M. T. McDonough
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 Floor Trader 

Item Making Intermediate

No. Date Cross Trade 

 1940 

41 23 " "

42 23 " "

43 23 " "

44 23 P. J. Barrett

45 23 M. Weis

46 24 " "

47 24 " "

48 24 M. T. McDonough

49 26 F. Spinney

50 26 P. J. Barrett

51 27 M. E. Latimer

52 28 M. T. McDonough

53 28 M. Weis

54 28 " "

55 29 P. J. Barrett

56 29 [ILLEGIBLE TEXT]

Transactions for Account of P. A. Nelson 

Quantity 

Item (In thousands of bushels) 

No. Date Bought Sold Price 

1940 (In cents) 

1 Feb. 1 5 93-1/4

2 3 5 93-1/2

3 3 5 94-1/8

4 8 10 96

5 8 5 96-3/8

6 8 5 96-3/4

7 9 20 98

8 9 10 97-1/2

9 10 5 96-7/8

10 10 5 97

11 10 5 97

12 10 10 96-3/4

13 16 5 100-1/2

14 16 5 98-3/4

15 17 15 100-3/4

16 17 5 101-1/2

17 17 5 100-7/8

18 17 5 101

19 19 5 100-3/8

20 20 5 101

21 20 10 101-3/4

22 20 5 102

23 20 10 102

24 20 5 102

25 20 20 102-3/4

26 20 5 102-3/4

27 20 5 103-1/4

28 20 5 102-1/2

29 20 5 102-1/2

30 21 5 104-1/8

31 21 5 104-1/4

32 21 10 104

33 21 10 104-3/8

34 21 5 103

35 21 5 103

36 21 5 103-1/2

37 21 5 103-1/2

38 23 5 104

39 23 5 104
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 Floor Trader 

Item Making Intermediate

No. Date Cross Trade 

 1940 

40 23 5 105

41 23 10 105-1/4

42 23 5 104-3/4

43 23 5 104-3/4

44 23 5 104-7/8

45 23 5 104-3/8

46 24 5 102-3/4

47 24 5 102-3/8

48 24 5 103-1/2

49 26 5 100-3/8

50 26 10 101-3/4

51 27 25 100-1/8

52 28 10 100-1/2

53 28 5 101

54 28 5 [ILLEGIBLE TEXT]

55 29 15 [ILLEGIBLE TEXT]

56 29 [ILLEGIBLE TEXT] [ILLEGIBLE TEXT]

Transactions for Account of P. A. Nelson Bought From or Sold To Item Clearing Member Carrying (Clearing Member Item 

No. Date Nelson's Account on Opposite Side) No. 

1940 

1 Feb. 1 I. P. Skolly O. S. Nickles & Co. 1

2 3 T. P. McGuire " " " 2

3 3 I. P. Skolly A. J. Riffle 3

4 8 " " I. P. Skolly 4

5 8 " " J. S. Bache & Co. 5

6 8 " " " " " 6

7 9 " " " " " 7

8 9 " " " " " 8

9 10 T. P. McGuire " " " 9

10 10 " " " " " 10

11 10 " " " " " 11

12 10 " " C. J. Wightman & Co. 12

13 16 I. P. Skolly J. S. Bache & Co. 13

14 16 " " O. S. Nickles & Co. 14

15 17 T. P. McGuire " " " 15

16 17 " " " " " 16

17 17 " " T. F. Molyneaux 17

18 17 " " J. S. Bache & Co. 18

19 19 " " " " " 19

20 20 I. P. Skolly T. J. Friel 20

21 20 T. P. McGuire A. J. Riffle 21

22 20 " " " " 22

23 20 " " " " 23

24 20 " " " " 24

25 20 " " " " 25

26 20 " " " " 26

27 20 I. P. Skolly J. S. Bache & Co. 27

28 20 T. P. McGuire " " " 28

29 20 " " " " " 29

30 21 I. P. Skolly " " " 30

31 21 T. P. McGuire " " " 31

32 21 " " O. S. Nickles & Co. 32

33 21 " " A. J. Riffle 33

34 21 " " C. J. Wightman & Co. 34

35 21 " " " " " 35

36 21 " " " " " 36

37 21 I. P. Skolly " " " 37
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 Floor Trader 

Item Making Intermediate

No. Date Cross Trade 

 1940 

38 23 T. P. McGuire " " " 38

39 23 " " " " " 39

40 23 " " A. J. Riffle 40

41 23 " " " " 41

42 23 " " " " 42

43 23 " " " " 43

44 23 " " O. S. Nickles & Co. 44

45 23 " " J. S. Bache & Co. 45

46 24 " " " " " 46

47 24 " " " " " 47

48 24 " " A. J. Riffle 48

49 26 " " T. F. Molyneaux 49

50 26 " " O. S. Nickles & Co. 50

51 27 T. P. McGuire M. E. Latimer 51

52 28 " " A. J. Riffle 52

53 28 " " J. S. Bache & Co. 53

54 28 [ILLEGIBLE TEXT] " " " 54

55 29 [ILLEGIBLE TEXT] [ILLEGIBLE TEXT] 55

56 29 [ILLEGIBLE TEXT] [ILLEGIBLE TEXT] [ILLEGIBLE TEXT] 

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