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Commodity Futures Trading Commission 

CEA CASES 

NAME: PEERS AND COMPANY, HENRY M. PEER, JR., LEADING EMBROIDERY COMPANY, 

SMITHERMAN COTTON MILLS, INC., AND LEON SALKIND 

CITATION: 13 Agric. Dec. 875 

DOCKET NUMBER: 61 

DATE: SEPTEMBER 17, 1954 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 4033) 

In re PEERS AND COMPANY, HENRY M. PEER, JR., LEADING EMBROIDERY COMPANY, 

SMITHERMAN COTTON MILLS, INC., AND LEON SALKIND. CEA Docket No. 61. Decided 

September 17, 1954. 

Suspension of Trading Privileges -- Violation of Act -- Wash Sales -- Default

Where complaint alleges that respondents caused the execution of fictitious 

trades on the New York Cotton Exchange, held, respondents, by failing to file a 

answer, are deemed to have admitted the material facts alleged and waived an 

oral hearing, and the transactions complained of were in violation of the act 

for which respondents are denied all trading privileges on all control markets 

for a period of three months. 

Mr. Benj. M. Holstein for Commodity Exchange Authority. Mr. Jack W. Bain,

Referee. 

Decision by Thomas J. Flavin, Judicial Officer 

PRELIMINARY STATEMENT

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

Chapter 1) instituted by a complaint filed by the Acting Secretary of 

Agriculture on February 17, 1954. In the complaint it is alleged that Leon 

Salkind controlled Leading Embroidery Company and Smitherman Cotton Mills, Inc., 

and by giving orders for them caused Henry M. Peers, Jr., and Peers and Company 

to have wash or fictitious trades in futures executed on the New York Cotton 

Exchange in violation of the act. Peers and Company and Henry M. Peers, Jr., 

filed an answer to the complaint in April 1954, but the other three respondents 

have filed nothing. 

After three continuances, an oral hearing was opened in New York, New York, 

on June 8, 1954, by Hearing Examiner Jack W. Bain, the referee. Respondents 

Peers and Company and Henry M. Peers, Jr., appeared but the other respondents, 

although duly notified, did not. Admissions and recommendations were made at 

the hearing, but no evidence was presented. Thereafter, on June 28, 1954, an 

order was issued disposing of the proceeding as it applied to respondents Peers 

and Company and Henry M. Peers, Jr. (13 Agric. Dec. 597 (13 A.D. 597)), to which 

reference is made for its contents. 

In accordance with section 0.9 of the rules of practice (17 CFR Part O), the 

failure of the other three respondents to answer constituted admission of the 

allegations in the complaint and waiver of hearing on their part, and authorized 

issuance of the referee's report without further investigation or hearing. The 

referee issued a report recommending that such respondents be found to have 

violated the act as charged. Copies of the report were served upon these 

respondents. They did not file exceptions. 
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FINDINGS OF FACT

1. Respondent Leading Embroidery Company is a partnership organized under New 

York laws and registered in New Jersey with offices at 5620 Bergenline Avenue, 

West New York, New Jersey. Its partners are Leon Salkind, principal partner, 

and Harold J. Baum and Max Muehlfriedel. 

2. Respondent Smitherman Cotton Mills, Inc., is a North Carolina corporation 

with offices at 5620 Bergenline Avenue, West New York, New Jersey. It is wholly 

owned and controlled 

by the partnership mentioned in Finding 1. Leon Salkind is its president, 

Harold J. Baum is its secretary-treasurer, and both Salkind and Baum are 

directors. 

3. At all times material herein, respondent Leon Salkind managed and 

controlled the business of the partnership and corporation mentioned in Findings 

1 and 2, and the futures transactions described in subsequent findings were 

decided upon and made at his direction as principal partner and president, 

respectively. 

4. About September 10, 1952, respondents Leading Embroidery Company and 

Smitherman Cotton Mills, Inc., acting through respondent Leon Salkind, each 

opened a regulated commodity account with Peers and Company, a futures 

commission merchant registered under the act and a clearing member of the New 

York Cotton Exchange, a contract market duly designated under the act. 

5. About September 15, 1952, respondent Leon Salkind simultaneously ordered 

Peers and Company to buy 4,000 bales of March 1953 cotton futures on the New 

York Cotton Exchange for the account of respondent Leading Embroidery Company 

and to sell 4,000 bales of March 1953 cotton futures for the account of 

respondent Smitherman Cotton Mills, Inc. Peers and Company simultaneously 

transmitted both orders to Aubrey Wolford, a registered floor broker under the 

act, for execution. Acting as floor broker on both sides of the orders, Wolford 

purchased and sold 4,000 bales of March 1953 cotton futures at 39.31 cents per 

pound on the floor of the New York Cotton Exchange. Wolford reported the 

purchase and sale to Peers and Company, and Peers and Company entered the 

transactions in its books in the respective accounts of the respondent 

partnership and the respondent corporation and notified Salkind that his orders 

had been executed. 

6. About November 12, 1952, respondent Leon Salkind simultaneously ordered 

Peers and Company to buy 3,500 bales of March 1953 cotton futures on the New 

York Cotton Exchange for the account of respondent Smitherman Cotton Mills, 

Inc., and to sell 4,000 bales of March 1953 cotton futures for the account of 

respondent Leading Embroidery Company. Peers and Company simultaneously 

transmitted both orders to Aubrey Wolford for execution. Acting as floor broker 

on both sides of the orders, Wolford purchased and sold 3,500 bales of March 

1953 cotton futures at 36.06 cents per pound on the floor of the New York Cotton 

Exchange. Wolford reported the purchase and sale to Peers and Company, and 

Peers and Company entered the transactions in its books in the respective 

accounts of the respondent corporation and the respondent partnership and 

notified Salkind that his orders had been executed. 

7. About November 12, 1952, respondent Leon Salkind, simultaneously ordered 

Peers and Company to buy 4,000 bales of May 1953 cotton futures on the New York 

Cotton Exchange for the account of respondent Smitherman Cotton Mills, Inc., and 

to sell 4,000 bales of May 1953 cotton futures for the account of respondent 

Leading Embroidery Company. Peers and Company simultaneously transmitted both 

orders to Aubrey Wolford for execution. Acting as floor broker on both sides of 

the orders, Wolford purchased and sold 4,000 bales of May 1953 cotton futures at 
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36.16 cents per pound on the floor of the New York Cotton Exchange. Wolford 

reported such purchase and sale to Peers and Company, and Peers and Company 

entered the transactions in its books in the respective accounts of the 

respondent corporation and the respondent partnership, and notified Salkind that 

his orders had been executed. 

8. The futures transactions mentioned in the preceding findings could be used 

for hedging transactions in interstate commerce in cotton or cotton products or 

byproducts, or for determining the price basis of interstate transactions in 

cotton, or for delivering cotton sold, shipped, or received in interstate 

commerce. 

CONCLUSIONS

The transactions described in Findings of Fact 5, 6 and 7 were wash sales, or 

fictitious sales, in violation of Section 4c of the Commodity Exchange Act (7 

U.S.C. 6c). In re Jean Goldwurm et al., 7 Agric. Dec. 265 (7 A.D. 265 (1948). 

For causing them to be made, respondents Leon Salkind, Leading Embroidery 

Company, and Smitherman Cotton Mills, Inc., should be denied all trading 

privileges on all contract markets for a period of three months. 

ORDER

Beginning on the 20th day after the date of this order, all contract markets 

shall refuse all trading privileges thereon to Leon Salkind, Leading Embroidery 

Company, and Smitherman 

Cotton Mills, Inc., respondents herein, for a peroid of three months. This 

order applies not only to trading done and positions held by the respondents 

directly but also to trading done and positions held by the respondents 

indirectly either through persons owned or controlled by the respondents or 

otherwise. 

A copy hereof shall be served upon each of the respondents in the proceeding 

and upon each contract market. 

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