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Commodity Futures Trading Commission 

CEA CASES 

NAME: HARRY SCHLECTER, ALSO KNOWN AS HARRY KAY AND AARON D. SCHLECTER 

DOCKET NUMBER: 194 

DATE: AUGUST 3, 1972 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Harry Schlecter, also known as Harry Kay and Aaron D. Schlecter, 

Respondent 

CEA Docket No. 194 

Complaint and Notice of Hearing Under the Commodity Exchange Act 

There is reason to believe that the respondent, Harry Schlecter, has violated 

the Commodity Exchange Act (7 U.S.C. Chap. 1), hereinafter referred to as the 

Act, and the regulations made pursuant thereto. In accordance with the 

provisions of section 6(b) and (c) of the Act (7 U.S.C. 9(b), 13b), this 

complaint and notice of hearing is issued stating the charges in that respect as 

follows: 

I 

The respondent, Harry Schlecter, an individual, whose address is 200 N. E. 

135th Street, Apt. 306, North Miami, Florida 33161, was at all times material 

herein, subject to an order of the Secretary of Agriculture issued October 4, 

1966 which reads as follows: 

"Effective November 1, 1966, all contract markets shall refuse all trading 

privileges to respondent Harry Kay for a period of five years, such refusal to 

apply to all trading done and positions held by said respondent directly or 

indirectly, whether for his own account or for the accounts of other persons." 

(25 Agric. Dec. 1208, 1212 (25 A.D. 1208, 1212)) 

Said order was imposed for a violation of the Act involving cheating and 

fraud. (25 Agric. Dec. 1208, 1211 (25 A.D. 1208, 1211)) 

II 

Bear, Stearns and Co., hereinafter referred to as Bear, Stearns, and Arnold 

D. Kamen and Co., hereinafter referred to as Kamen, were at all times material 

herein registered futures commission merchants under the Act. 

III 

The futures transactions hereinafter referred to involved commodities 

regulated by the Act and were made on or subject to the rules of contract 

markets which were duly designated as such under the Act. Such commodities and 

the contract markets on which they were traded are listed below: 

Regulated Commodity Contract Market 

Corn, soybeans, soybean oil, wheat Chicago Board of Trade 

Eggs, hogs, Idaho potatoes, live Chicago Mercantile Exchange 

cattle and pork bellies 

Frozen concentrated orange juice Citrus Associates of the 

New York Cotton Exchange, Inc. 
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Regulated Commodity Contract Market 

Cotton New York Cotton Exchange 

Maine potatoes New York Mercantile Exchange 

IV 

During the period from on or about August 18, 1970, to on or about November 

17, 1970, the respondent gave orders to Bear, Stearns calling for the execution 

of the futures trades listed below for 

an account carried by Bear, Stearns in the name of Otus Anstalt and caused Bear, 

Stearns to accept such orders, with the result that the following futures trades 

were made for such account: 

Contracts 

Bought Sold Commodity Market 

4 Wheat Chicago Board of Trade 

6 Corn Chicago Board of Trade 

14 30 Soybeans Chicago Board of Trade 

21 Maine potatoes New York Mercantile Exchange 

3 Idaho potatoes Chicago Mercantile Exchange 

9 Orange juice Citrus Associates of 

the N. Y. Cotton Exchange 

10 10 Soybean oil Chicago Board of Trade 

V 

a. In or about December 1970, the respondent induced Kamen to employ the 

respondent to solicit and accept orders from customers for the purchase and sale 

of commodities for future delivery and to act as manager of Kamen's branch 

office in Miami Beach, Florida, and the respondent was so employed during the 

period from on or about January 12, 1971, to on or about June 15, 1971. 

b. During the period from on or about October 12, 1970, to on or about March 

17, 1971, the respondent gave orders to Kamen calling for the execution of the 

futures trades listed below for accounts carried by Kamen in the name of Otus 

Anstalt and caused Kamen to accept such orders, with the result that the 

following futures trades were made for such accounts: 

See original document-page 3 

Contracts Bought Sold Commodity Market 

30 30 Marine potatoes New York Mercantile Exchange 

210 210 Eggs Chicago Mercantile Exchange 

38 36 Soybeans Chicago Board of Trade 

29 29 Pork bellies Chicago Mercantile Exchange 

52 52 Wheat Chicago Board of Trade 

64 64 Corn Chicago Board of Trade 

5 5 Hogs Chicago Mercantile Exchange 

c. During the period from on or about January 6, 1971, to on or about May 13, 

1971, the respondent gave orders to Kamen calling for the execution of the 

futures trades listed below for an account carried by Kamen for the respondent 

and caused Kamen to accent such orders, with the result that the following 

futures trades were made for such account: 

Contracts Bought Sold Commodity Market 

11 11 Soybean oil Chicago Board of Trade 

4 4 Orange juice Citrus Associates of the 

N. Y. Cotton Exchange 

4 4 Eggs Chicago Mercantile Exchange 

5 5 Live cattle Chicago Mercantile Exchange 

6 6 Hogs Chicago Mercantile Exchange 
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Contracts 

Bought Sold Commodity Market 

8 8 Cotton New York Cotton Exchange 

VI 

a. By reason of the facts alleged herein, (1) the respondent willfully caused 

Bear, Stearns and Kamen to accept orders from him for the purchase and sale of 

commodities for future delivery on or subject to the rules of contract markets 

during a period when he was denied trading privileges by order of the Secretary 

of Agriculture, 

in violation of section 8a(3) of the Act (7 U.S.C. 12a(3)); and (2) the 

respondent willfully caused Kamen to employ him in a capacity which involved the 

solicitation, acceptance and execution of orders for futures trading in 

regulated commodities, in violation of section 1.49 of the regulations under the 

Act (17 CFR 1.49). 

b. By reason of the provisions of section 13(a) of the Act (7 U.S.C. 13c(a)), 

the respondent may be held responsible for such violations as a principal. 

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

served upon the respondent and this proceeding shall be governed by sections 

0.1, 0.2, 0.4(b), 0.5 through 0.22, and 0.28 of the rules of practice under the 

Commodity Exchange Act (17 CFR 0.1, 0.2, 0.4(b), 0.5 through 0.22, 0.28). 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 four copies, fully and 

completely stating the nature of the defense and admitting or denying, 

specifically and in detail, each allegation of this complaint. Allegations not 

answered will be deemed admitted for the purposes of this proceeding. Failure 

to file an answer will constitute an admission of all the allegations of this 

complaint and a waiver of hearing. The filing of an answer in which all of the 

material allegations of fact contained in the complaint are admitted 

likewise shall constitute a waiver of hearing unless a hearing is requested. 

The respondent is hereby notified that unless hearing is waived, a hearing will 

be held at a date, time and place 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 appropriate order 

should not be issued in accordance with the Commodity Exchange Act, (1) 

prohibiting the respondent from trading on or subject to the rules of any 

contract market, and directing that all contract markets refuse all trading 

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

(2) directing that the respondent shall cease and desist from violating the 

Commodity Exchange Act and regulations in the manner alleged herein. 

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. 

August 3, 1972 

[SEE SIGNATURE IN ORIGINAL] 

Richard E. Lyng 

Assistant Secretary 

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