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Commodity Futures Trading Commission 

CEA CASES 

NAME: JOHN HENRY PHELAN, III 

DOCKET NUMBER: 119 

DATE: MAY 22, 1964 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: John Henry Phelan, III, Respondent 

CEA Docket No. 119 

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

Act 

There is reason to believe that the respondent, John Henry Phelan, III, has 

violated the provisions of the Commodity Exchange Act (7 U.S.C. § 1 et seq.), 

and the rules and regulations made pursuant to its requirements (17 CFR, Part 

1), 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 stating the charges 

in that respect as follows: 

I 

Respondent, John Henry Phelan, III, is an individual whose mailing address is 

P. O. Box 2270, Beaumont, Texas. 

II 

The Board of Trade of the City of Chicago, hereinafter referred to as the 

Chicago Board of Trade, and the New York Mercantile Exchange are now and were at 

all times material to this complaint duly designated contract markets under the 

Commodity Exchange Act. 

III 

On each business day during the periods November 29, 1963, through January 

27, 1964, and February 27 through March 4, 1964, the respondent held or 

controlled a net long or a net short position in wheat futures on the Chicago 

Board of Trade, which position ranged from 200,000 bushels to 250,000 bushels in 

a single future. By reason of the fact that such quantities were equal to or in 

excess of 200,000 bushels, the respondent was in reporting status and was 

required to report to the Commodity Exchange Authority with respect to all 

transactions executed and all open contract positions held or controlled by him, 

in all wheat futures on all boards of trade on said dates and with respect to 

all transactions by reason of which the respondent's position was reduced below 

reporting levels, as provided in section 4i of the Commodity Exchange Act (7 

U.S.C. § 6i) and sections 15.01, 15.02, 15.03, 18.00, 18.01 and 18.03 of the 

regulations thereunder (17 CFR §§ 15.01, 15.02, 15.03, 18.00, 18.01, 18.03). 

IV 

On December 3, 4 and 12, 1963, January 7, 8 and 9, 1964, and February 27, 

1964, while the respondent was in reporting status as described in paragraph III 

above, and on January 28 and March 5, 1964, when the respondent's position was 

reduced below 200,000 bushels, transactions in wheat futures on the Chicago 

Board of Trade were executed on his behalf, but the respondent failed and 

refused to submit reports 
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to the Commodity Exchange Authority, in willful violation of the aforesaid 

sections of the Commodity Exchange Act and the regulations thereunder. 

V 

On each business day during the periods December 6 through December 10, 1963, 

and January 3 through March 5, 1964, the respondent held or controlled a net 

long or a net short position in soybean futures on the Chicago Board of Trade, 

which position ranged from 200,000 bushels to 725,000 bushels in a single 

future. By reason of the fact that such quantities were equal to or in excess 

of 200,000 bushels, the respondent was in reporting status and was required to 

report to the Commodity Exchange Authority with respect to all transactions 

executed and all open contract positions held or controlled by him, in all 

soybean futures on all boards of trade on said dates and with respect to all 

transactions by reason of which the respondent's position was reduced below 

reporting levels, as provided in section 4i of the Commodity Exchange Act (7 

U.S.C. § 6i) and sections 15.01, 15.02, 15.03, 18.00, 18.01 and 18.03 of the 

regulations thereunder (17 CFR §§ 15.01, 15.02, 15.03, 18.00, 18.01, 18.03). 

VI 

On December 6, 1963, January 3, 7, 9, 10, 13, 14, 15, 28 and 31, 1964, 

February 3, 5, 6, 11, 13, 25, 27 and 28, 1964, and on March 5, 1964, while the 

respondent was in reporting status as described in paragraph V above, and on 

December 11, 1963, and March 6, 1964, when 

the respondent's position was reduced below 200,000 bushels, transactions in 

soybean futures on the Chicago Board of Trade were executed on his behalf, but 

the respondent failed and refused to submit reports to the Commodity Exchange 

Authority, in willful violation of the afore-said sections of the Commodity 

Exchange Act and the regulations thereunder. 

VII 

On each business day during the period April 2 through April 22, 1964, the 

respondent held or controlled a net short position in potato futures on the New 

York Mercantile Exchange, which position ranged from 32 carlots to 102 carlots 

in a single future. By reason of the fact that such quantities were equal to or 

in excess of 25 carlots, the respondent was in reporting status and was required 

to report to the Commodity Exchange Authority with respect to all transactions 

executed and all open contract positions held or controlled by him, in all 

potato futures on all boards of trade on said dates and with respect to all 

transactions by reason of which the respondent's position was reduced below 

reporting levels, as provided in section 4i of the Commodity Exchange Act (7 

U.S.C. § 6i) and sections 15.01, 15.02, 15.03, 18.00, 18.01 and 18.03 of the 

regulations thereunder (17 CFR §§ 15.01, 15.02, 15.03, 18.00, 18.01, 18.03). 

VIII 

On April 2, 3, 14, 15 and 22, 1964, while the respondent was in reporting 

status as described in paragraph VII above, transactions in potato futures on 

the New York Mercantile Exchange were executed on his behalf, but the respondent 

failed or refused to submit reports to the Commodity Exchange Authority in 

willful violation of the aforesaid sections of the Commodity Exchange Act and 

the regulations thereunder. 

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

served upon the said respondent. The respondent 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 

an original and five copies, fully and completely stating the nature of the 
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defense and admitting or denying, specifically and in detail, each material and 

relevant allegation of this complaint. Allegations not answered will be deemed 

admitted for the purpose of this proceeding. Failure to file an answer will 

constitute an admission of all the material allegations of this complaint and 

waiver of hearing. The respondent is hereby notified that unless hearing is 

waived, either expressly or by failure to file an answer, and request a hearing, 

a hearing will be held at 10:00 a.m., local time, on July 15, 1964, in Beaumont, 

Texas, at a place therein to be specified later, before 

a referee designated to conduct such hearing. At such hearing the respondent 

will have the right to appear and show cause, if any there be, why an order 

should not be made directing that all contract markets refuse all trading 

privileges to the respondent for such period of time as may be determined. 

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

respondent at least twenty (20) days prior to the date set for hearing. 

Done at Washington, D. C. 

MAY 22 1964 

[SEE SIGNATURE IN ORIGINAL] 

Assistant Secretary 

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