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Commodity Futures Trading Commission 

CEA CASES 

NAME: WEBSTER E. COLLINS 

DOCKET NUMBER: 121 

DATE: OCTOBER 7, 1964 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Webster E. Collins, Respondent 

CEA Docket No. 121 

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

Act 

There is reason to believe that the respondent, Webster E. Collins, attempted 

to manipulate and did manipulate the price of a commodity for future delivery on 

or subject to the rules of a board of trade in violation of sections 6(b) and 9 

of the Commodity Exchange Act (7 U.S.C. 9, 13), 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 against the respondent as 

follows: 

I 

The respondent, Webster E. Collins, an individual whose business address is 

170 Lyman Street, Springfield, Massachusetts, is now, and was at all times 

material herein, a member of the Wool Associates of the New York Cotton 

Exchange, Inc. 

II 

The Wool Associates of the New York Cotton Exchange, Inc., hereinafter 

sometimes referred to as the exchange, is now, and was at all times material 

herein, a board of trade duly designated as a contract market under the 

Commodity Exchange Act. 

III 

The futures transactions referred to in this complaint relate to the May 1963 

wool future on the Wool Associates of the New York Cotton Exchange, Inc. A wool 

futures contract on the exchange is a contract for the grease equivalent of 

6,000 pounds (clean weight) of wool. The last day for trading in the May 1963 

wool future on the exchange was May 23, 1963, and that was also the last day on 

which notice could be given of intention to deliver wool in satisfaction of 

positions in such future. In order to give notice of intention to deliver wool 

in satisfaction of such futures positions, the person making delivery was 

required to have the amount of wool referred to in the delivery notice, and such 

wool must have been inspected and certificated in accordance with the rules of 

the exchange and be located in a warehouse (in the Greater Boston, 

Massachusetts, area) approved by the exchange for delivery. 

IV 

On April 23, 1963, the day prior to the first day for issuing notices of 

intention to deliver wool on short futures contracts in the May 1963 wool future 

on the exchange, the respondent owned or controlled a net long position of 210 
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contracts in such future, which position constituted approximately 48.8 percent 

of the total long open interest on that day. 

V 

On May 10, 1963, on which day the respondent owned or controlled a net long 

position of 207 contracts in the May 1963 wool future, the respondent contracted 

to sell to a wool merchant an amount of certificated wool equivalent to 161 

futures contracts at a price of 128.0 cents per pound, with the agreement or 

understanding that neither such certificated wool nor other certificated wool 

owned or controlled by such wool merchant would be available to the holders of 

short contracts for delivery on the May 1963 wool future. On the same day, May 

10, 1963, the price of the May 1963 wool future ranged from 132.4 cents per 

pound to 132.5 cents per pound, closing at 132.5 cents per pound. 

VI 

By the close of business on May 21, 1963, the day prior to the penultimate 

day for trading in the May 1963 wool future, the net long position owned or 

controlled by the respondent in the May 1963 wool future amounted to 196 

contracts, an amount representing approximately 79.4 percent of the total long 

open interest in such future. By the close of business on May 22, 1963, next to 

the last day of trading in the May 1963 wool future, the net long position owned 

or controlled by the respondent in the May 1963 wool future amounted to 186 

contracts, an amount representing approximately 95.4 percent of the total long 

open interest in such future. 

VII 

At the close of business on May 21, 1963, the total stocks of certificated 

wool were sufficient to liquidate 332 futures contracts by delivery and at the 

close of business on May 22, 1963, the total stocks of certificated wool were 

sufficient to liquidate 341 futures contracts by delivery. Of such certificated 

stocks, in addition to the 161 lots under contract of sale as described in 

paragraph V above, the respondent owned or controlled an amount of certificated 

wool equivalent to 35 futures contracts at the close of business on May 21, 

1963, and to 40 futures contracts at the close of business on May 22, 1963. 

VIII 

By reason of the facts set forth in paragraphs V, VI and VII above, there was 

at all times on May 22 and 23, 1963, an insufficient supply of certificated wool 

available to the holders of short contracts in the May 1963 wool future on the 

exchange and of long contracts in such future which were held or controlled by 

persons other than the respondent, to permit the holders of short contracts to 

satisfy all such contracts without entering into futures transactions with the 

respondent. 

IX 

On May 21, 1963, the price of the May 1963 wool future ranged from 133.3 

cents per pound to 134.4 cents per pound, and closed at 134.0 cents per pound 

bid and 134.4 cents per pound asked. On May 22, 1963, the price of the May 1963 

wool future opened at 134.0 cents per pound bid and 134.8 cents per pound asked, 

and ranged from 134.4 cents per pound to 137.9 cents per pound, closing at 137.9 

cents per pound. On May 23, 1963, the last day for trading in the May 1963 wool 

future, the price of the future opened at 139.4 cents per pound and ranged from 

139.0 cents per pound to 140.4 cents per pound and closed at 140.4 cents per 

pound. 

X 

On May 22, 1963, the respondent sold 10 contracts at a price of 137.5 cents 

per pound. On May 23, 1963, the respondent sold 69 contracts, 25 contracts at a 

price of 139.4 cents per pound and 44 contracts at a price of 140.4 cents per 
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pound. The respondent's sales were made pursuant to orders which set forth the 

price limits below which such futures could not be sold. The respondent so 

acted with knowledge of the fact that there was an insufficient supply of 

certificated wool available to the shorts to satisfy the long futures contracts 

held by the respondent. 

XI 

In initiating and carrying out the transactions described, supra, the 

respondent acted with the purpose and intent of causing prices in the May 1963 

wool future which were arbitrary and artificial, and demanded and received such 

prices. By reason thereof, the respondent attempted to manipulate and in fact 

did manipulate the price of a commodity for future delivery on or subject to the 

rules of a board of trade, in wilful violation of sections 6(b) and 9 of the 

Commodity Exchange Act (7 U.S.C. 9, 13). 

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

served on the 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 three 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 purpose 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 respondent is 

hereby notified that unless hearing is waived, either expressly or by failure to 

file an answer, or by filing an answer in which all of the material allegations 

of fact contained 

in the complaint are admitted and a hearing is not requested, a hearing will be 

held at 10:00 a.m., local time, on the 10th day of November 1964, at 

Springfield, Massachusetts, 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 data set for hearing. 

Done at Washington, D. C. OCT. 7 1964 

[SEE SIGNATURE IN ORIGINAL] 

George L. Mehren 

Assistant Secretary 

LOAD-DATE: June 12, 2008 
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