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Commodity Futures Trading Commission 

CEA CASES 

NAME: SAMUEL E. COHEN, ALAN J. COHEN, JOEL COHEN, AND IVAR J. BLACKER 

CITATION: 26 Agric. Dec. 801 

DOCKET NUMBER: 139 

DATE: AUGUST 28, 1967 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 11,341) 

In re SAMUEL E. COHEN, ALAN J. COHEN, JOEL COHEN, and IVAR J. BLACKER. CEA 

Docket No. 139. Decided August 28, 1967. 

Trading limits -- Denial of trading privileges

The activities of respondents, acting pursuant to an expressed or implied 

agreement or understanding among themselves, in exceeding trading and position 

limits in the potato futures are violations of the act for which suspension of 

their trading privileges on all the contract markets for a period of 90 days is 

ordered. 

Earl L. Saunders for Commodity Exchange Authority. 

Ivar J. Blacker, Miami Beach, Fla., for respondents. 

John J. Curry, Hearing Examiner. 

Decision by Thomas J. Flavin, Judicial Officer

DECISION AND ORDER

In this disciplinary proceeding under the Commodity Exchange Act (7 U.S.C. 1 

et seq.), the complaint charged that respondents, acting pursuant to agreement 

or understanding among them, made trades and held positions on the May 1966 

potato future on the New York Merchantile Exchange in quantities in excess of 

permissible limits in wilful violation of section 4a of the Commodity Exchange 

Act (7 U.S.C. 6a) and the order of the Commodity Exchange 

Commission establishing limits on positions and daily trading in potatoes for 

future delivery (17 CFR 150.10). 

Respondents filed an answer and a hearing was held in Miami, Florida, on 

November 15, 1966, before Hearing Examiner John J. Curry. The hearing examiner 

issued a recommended decision to the effect that respondents had violated the 

act and the order of the Commission as charged in the complaint and a 

recommended order that respondents be denied trading privileges on the contract 

markets under the act for a period of 90 days. 

Respondents did not file exceptions to the recommended decision and order of 

the hearing examiner. In view of this and after consideration of the entire 

record, the recommended decision and order of the hearing examiner are adopted 

as the final decision and order herein. The order shall become effective on 

September 11, 1967. 

Copies hereof shall be served upon the parties and the contract markets under 

the act. 

HEARING EXAMINER'S RECOMMENDED DECISION AND ORDER 
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PRELIMINARY STATEMENT

This is an administrative proceeding under the Commodity Exchange Act (7 

U.S.C. 1 et seq.), instituted by a complaint and notice of hearing issued under 

section 6 (b) of the Act (7 U.S.C. 9) on August 3, 1966, by the Assistant 

Secretary of Agriculture. 

The complaint alleges that during the period September 29, 1965, through May 

10, 1966, the respondents, acting pursuant to an expressed or implied agreement 

or understanding among themselves, made trades and held positions in the May 

1966 potato future on the New York Mercantile Exchange in quantities in excess 

of permissible limits, in wilful violation of section 4a of the Commodity 

Exchange Act and the order of the Commodity Exchange Commission establishing 

limits on positions and daily trading in potatoes for future delivery (7 U.S.C. 

6a; 17 CFR 150.10). 

The respondents filed separate answers, the recitals in which are identical. 

Each respondent in his answer denies generally the principal allegations of the 

complaint and states that "the respondents 

named in the complaint never had a joint account and, in fact, each one traded 

for his own account, and each position was for his individual account." 

An oral hearing was held in Miami, Florida, on November 15, 1966. John J. 

Curry, Office of Hearing Examiners, United States Department of Agriculture, was 

assigned as Referee and presided at the hearing. Respondent Ivar J. Blacker, an 

attorney at law, appeared as counsel on behalf of the respondents, and 

respondents Samuel E. Cohen, Alan J. Cohen and Ivar J. Blacker testified in 

their own behalf. Respondent Joel Cohen was not present at the hearing. 

Earl L. Saunders, Office of the General Counsel, United States Department of 

Agriculture, appeared as counsel for the complainant. Three witnesses testified 

for the complainant and 51 exhibits were received in evidence on behalf of the 

complainant. Both parties filed briefs after the close of the hearing. 

PROPOSED FINDINGS OF FACT

1. The respondents are individuals residing in Miami Beach, Florida, with the 

following addresses: Samuel E. Cohen, 2995 Flamingo Drive; Alan J. Cohen, Saxony 

Hotel, 3200 Collins Avenue; Joel Cohen, 2995 Flamingo Drive; and Ivar J. 

Blacker, Casablanca Hotel, 6345 Collins Avenue. Respondent Samuel E. Cohen is 

the father of respondents Alan J. Cohen and Joel Cohen. The respondents, at all 

times material herein, were business associates or partners engaged in various 

enterprises, including the hotel business, and met daily to discuss the various 

enterprises in which they were engaged (Tr. 47, 49-51, 53, 98-99, 106-107). 

2. The trades and positions involved herein were trades and positions in the 

May 1966 potato future on the New York Mercantile Exchange, a duly designated 

contract market under the Commodity Exchange Act. Trading in the May 1966 

potato future was conducted in units of one contract or carlot consisting, at 

all times material herein, of 50,000 pounds of Maine-grown Irish potatoes. 

Trading in such future ended on May 10, 1966 (Tr. 31, 43). 

3. The following table shows the individual short positions and the combined 

short positions of the respondents in the May 1966 potato future as of the close 

of trading on each day on which there 

was a change in the position of any respondent (Tr. 35, 67; Complainant's 

Exhibits 42-45 and 46-50). 

Date Samuel E. Alan J. Joel Ivar J. Combined 

1965 Cohen Cohen Cohen Blacker Positions

Sept. 29 50 25 75

30 85 25 110
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Date Samuel E. Alan J. Joel Ivar J. Combined 

1965 Cohen Cohen Cohen Blacker Positions

Oct. 1 100 25 125

5 119 25 144

11 150 25 175

20 110 25 135

21 -- -- --

25 50 -- 50

27 100 -- 100

Dec. 9 150 50 200

15 150 100 250

22 150 100 100 350

23 150 150 100 400

1966 Jan. 17 150 150 150 50 500

21 144 150 150 50 494

25 144 150 100 -- 394

Mar. 4 144 150 144 150 588

25 144 150 144 50 488

28 144 150 144 100 538

Apr. 4 12 150 144 100 406

6 12 150 44 100 306

7 12 150 44 100 306

11 37 150 44 100 331

21 37 50 44 100 231

22 37 150 44 100 331

27 96 150 44 100 390

May 3 96 150 144 100 490

9 35 -- 144 -- 179

10 -- -- -- -- --

The above table shows all positions held by any respondent in the May 1966 

potato future except a long position of 105 carlots held by respondent Samuel E. 

Cohen on April 4, 5, and 6, 1966. All positions shown in the above table were 

speculative and all changes in such positions resulted from trades (Tr. 64, 

110). 

4. (a) On March 4, 1966, speculative sales of 44 carlots were made for the 

account of respondent Joel Cohen and 150 carlots for the account of respondent 

Ivar J. Blacker (Complainant's Exhibits 48 and 49). 

(b) On April 4, 1966, speculative purchases of 237 carlots were made for the 

account of respondent Samuel E. Cohen (Complainant's Exhibit 46). 

(c) On May 9, 1966, speculative purchases of 61 carlots were made for the 

account of respondent Samuel E. Cohen, 150 carlots for the account of respondent 

Alan J. Cohen and 100 carlots for the account of respondent Ivar J. Blacker 

(Complainant's Exhibits 46, 47 and 49). 

(d) On May 10, 1966, speculative purchases of 35 carlots were made for the 

account of respondent Samuel E. Cohen and 144 carlots for the account of 

respondent Joel Cohen (Complainant's Exhibits 46 and 48). 

5. The positions described in Finding of Fact number 3 hereof were held, and 

the trades described in Finding of Fact number 4 hereof were made, pursuant to 

an expressed or implied agreement or understanding among the respondents. 

6. On March 4, 1966, the Administrator of the Commodity Exchange Authority 

wrote a letter to each of the Cohen respondents. In all pertinent respects, the 

letters were identical. The letter addressed to respondent Alan J. Cohen was as 

follows (Complainant's Exhibit 51): 

"March 4, 1966 

"REGISTERED MAIL -- R.R.R. 
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Mr. Allen Cohen 

Saxony Hotel 

Miami Beach, Florida 

Dear Mr. Cohen: 

We have considered the trading and positions in potato futures on the New 

York Mercantile Exchange in your account and in the accounts of Mr. Samuel J. 

Cohen and Mr. Joel Cohen. 

Our analysis reveals a pattern from which it appears that the three accounts 

are trading in a manner which makes such accounts subject to the provisions of 

section 150.10(f) of the orders of the Commodity Exchange Commission, pertaining 

to speculative limits in potatoes as contained in Insert No. 1 in the attached 

pamphlet. 

This section states that the speculative limits apply to positions of, and 

trading by, two or more persons acting pursuant to an expressed or implied 

agreement or understanding, the same as if the positions were held by, or the 

trading were 

done by, a single individual. A similar provision is applicable to all other 

commodities for which limits have been established. 

It seems apparent that the combined positions of all these accounts are in 

excess of the speculative limits on potato futures, and should be reduced to 

within the permissible limits. The speculative limits on daily trading and 

positions in potato futures are 150 carlots in the March, April, and May 

futures, respectively, 300 carlots in any other future and 350 carlots in all 

futures combined. A guide to speculative limits on all commodities on which 

limits apply is also enclosed. Similar letters are being sent to Mr. Samuel J. 

Cohen and Mr. Joel Cohen. 

Sincerely yours, 

Alex C. Caldwell 

Administrator 

Enclosures -- 2" 

7. The letters described in Finding of Fact number 6 hereof, together with 

the enclosures mentioned in the letters, were sent by registered mail on March 

4, 1966. Respondent Alan J. Cohen received the letter addressed to him and 

informed respondents Samuel E. Cohen and Joel Cohen of its contents (Tr. 47, 54, 

60). The letters to respondents Samuel E. Cohen and Joel Cohen were returned 

unopened (Tr. 60). At the time the above letters were sent to the Cohen 

respondents, the Commodity Exchange Authority was not aware of respondent Ivar 

J. Blacker's position in the market, n1 and, therefore, did not send a letter to 

him (Tr. 63). 

n1. Respondent Ivar J. Blacker did not trade in the May 1966 potato 

future until March 4, 1966, the date the letters were mailed to the Cohen 

respondents. 

PROPOSED CONCLUSIONS

I

Section 4a of the Commodity Exchange Act (7 U.S.C. 6a) provides as follows: 

". . . it shall be unlawful for any person -- 

"(A) directly or indirectly to buy or sell, or agree to buy or sell, under 

contracts of sale of such commodity for future delivery on or subject to the 
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rules of the contract market or markets to which the order applies, any amount 

of such commodity during any one business day in excess of any trading 

limit fixed for one business day by the commission in such order for or with 

respect to such commodity; or 

"(B) directly or indirectly to buy or sell, or agree to buy or sell, under 

contracts of sale of such commodity for future delivery on or subject to the 

rules of any contract market, any amount of such commodity that shall result in 

giving such person a net long or net short position at any one time in or with 

respect to any such commodity in excess of any trading limit fixed by the 

commission for net long or net short position in such order for or with respect 

to such commodity." 

The order of the Commodity Exchange Commission establishing limits on 

position and daily trading in potato futures (17 CFR 150.10) provides as 

follows: 

"§ 150.10. Limits on position and daily trading in potatoes for future 

delivery. The following limits on the amount of trading under contracts of sale 

of potatoes for future delivery on or subject to the rules of any contract 

market, which may be done by any person, are hereby proclaimed and fixed, to be 

in full force and effect on and after November 27, 1964. 

"(a) Position limit. The limit on the maximum net long or net short position 

which any person may hold or control in potatoes on or subject to the rules of 

any one contract market is 300 carlots in any one future and 350 carlots in all 

futures combined: Provided, That no person may hold or control a net long or net 

short position in excess of . . . (3) 150 carlots in the May potato future. 

"(b) Daily trading limit. The limit on the maximum amount of potatoes which 

any person may buy, and on the maximum amount which any person may sell, on or 

subject to the rules of any one contract market during any one business day is 

300 carlots in any one future and 350 carlots in all futures combined: Provided,

That no person may buy or sell during any one business day more than . . . (3) 

150 carlots in the May potato future. 

"(f) Application of limits. The foregoing limits upon positions and upon 

daily trading shall be construed to apply, respectively, to positions held by, 

and trading done by, two or more persons acting pursuant to an expressed 

or implied agreement or understanding, the same as if the positions were held 

by, or the trading were done by, a single individual." (Emphasis Supplied). 

II 

The respondents do not dispute the fact that their combined trades and 

positions exceeded the permitted limits on the dates in question. The only 

issue is whether such trades were made, and such positions were held, by the 

respondents acting pursuant to an expressed or implied agreement or 

understanding. The respondents deny the existence of any such agreement or 

understanding, and insist that each of them traded independently on the basis of 

his own judgment. The record proves the contrary. 

The following facts are established by evidence which the respondents have 

neither contradicted nor challenged: 

(1) None of the respondents entered the May potato futures market until 

September 29, 1965 (Tr. 55, 67, 76-78; Complainant's Exhibits 46-50). 

(2) With only one exception, the positions of each respondent were at all 

times on the short side of the market n2 (Tr. 55-57; Complainant's Exhibits 46-

50). 
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(3) With only two exceptions, the positions of each respondent were all held 

through the same futures commission merchant, F. J. Reardon, Inc. n3 (Tr. 55-57; 

Complainant's Exhibits 1-41, 46-50). 

(4) With the exception of respondent Samuel E. Cohen, none of the respondents 

had previously traded through F. J. Reardon, Inc., and he had traded in potato 

futures through that firm for approximately four or five years prior to the 

period in question (Tr. 76-78, 81-84, 91-93). 

(5) Respondent Samuel E. Cohen gave to F. J. Reardon, Inc. most, if not all, 

of the orders calling for the trades for each respondent (Tr. 3-31, 72-76, 79-

84, 92-95, 104, 108; Complainant's Exhibits 1-41). 

(6) Respondent Samuel E. Cohen paid to F. J. Reardon, Inc. not only the 

margin for his own trades but a substantial portion of the margin required for 

the trades of each of the other respondents (Tr. 72-76, 84-85). 

(7) F. J. Reardon, Inc. sent all confirmations and accountings, which it 

prepared in connection with the trading of each respondent, to a single address 

-- that of respondent Samuel E. Cohen (Tr. 34-36, 85-86; Complainant's Exhibits 

42-45). 

(8) During the period in question, reports were submitted to the Commodity 

Exchange Authority showing the trades and positions of each respondent, and all 

such reports were prepared and submitted by a single individual -- respondent 

Ivar J. Blacker (Tr. 49, 104-105). n4 

n2. On April 4, 1966, respondent Samuel E. Cohen established a long 

position of 150 carlots in his account at The Siegel Trading Co. This 

position was liquidated on April 7, 1966 (Complainant's Ex. 46). 

n3. In addition to the long position of 105 carlots established in the 

Samuel E. Cohen account at The Siegel Trading Co., respondent Joel Cohen 

established a short position of 25 carlots in his account at Bache & Co., 

Incorporated, on September 29, 1965. This position was covered on October 

21, 1965 (Complainant's Exhibit 48). 

n4. Under the regulations issued pursuant to the Commodity Exchange Act, 

a trader is obligated to report to the Commodity Exchange Authority 

whenever he holds a position in any one potato future in the amount of 25 

carlots or more (17 CFR 15.00, 15.01, 15.02, 15.03). 

Neal H. Stults, Assistant Director of the Compliance Division of the 

Commodity Exchange Authority, analyzed the respondents' trading, and concluded 

that they followed "a very set pattern" of making their trades as a group and 

distributing them among their accounts at such times and in such quantities as 

to avoid going over the maximum permissible limit in any one account (Tr. 3-31, 

54-58, 65-67). In describing the factors which influenced him in his 

conclusion, Mr. Stults pointed out: (1) New accounts were regularly brought into 

the market when the account or accounts already in the market held positions at 

or near the maximum permissible limit, and, in each instance, the first sale 

which was made for each new account was so large that if the sale had been made 

for any account already in the market, the position in that account would have 

exceeded the maximum permissible limit; and (2) In most instances, each sale, 

which was made for any account already in the market, was so large that no other 

account holding a position could have accommodated the sale without exceeding 

the maximum permissible limit (Tr. 54-58). Mr. Stults gave inter alia the 

following examples which illustrate the manner in which new accounts were 

brought into the market and sales in the May 1966 potato future were distributed 

among the respondents' accounts (Tr. 3-31, 54-58): 

(1) At the opening of trading on December 9, 1965, respondent Samuel E. Cohen 

was the only respondent who held a position, 
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and he held a short position of 100 carlots. On December 9, respondent Samuel 

E. Cohen gave to F. J. Reardon, Inc. an order calling for the sale of 100 

carlots. The order was executed on December 9, and in accordance with 

respondent Samuel E. Cohen's instructions, the 100 carlots were allocated as 

follows, 50 carlots to his own account, and the remaining 50 carlots to a new 

account which he opened for respondent Joel Cohen. 

(2) At the opening of trading on December 22, 1965, the only respondents 

holding positions were Samuel E. Cohen and Joel Cohen, and they held short 

positions of 150 carlots and 100 carlots, respectively. On December 22, 

respondent Samuel E. Cohen gave to F. J. Reardon, Inc. an order calling for the 

sale of 100 carlots. The order was executed on December 22, and in accordance 

with respondent Samuel E. Cohen's instructions, a new account was opened for 

respondent Alan J. Cohen, and the 100 carlots were allocated to that account. 

(3) At the opening of trading on January 17, 1966, respondents Samuel E. 

Cohen and Alan J. Cohen each held a short position of 150 carlots, and 

respondent Joel Cohen held a short position of 100 carlots. Respondent Ivar J. 

Blacker held no position. On January 17, respondent Samuel E. Cohen gave to F. 

J. Reardon, Inc. an order calling for the sale of 60 carlots and another order 

calling for the sale of 40 carlots. The orders were executed on January 17, and 

in accordance with respondent Samuel E. Cohen's instructions, the 100 carlots 

were allocated as follows, 50 carlots to the Joel Cohen account, and the 

remaining 50 carlots to a new account which respondent Samuel E. Cohen opened 

for respondent Ivar J. Blacker. 

(4) At the opening of trading on March 4, 1966, respondents Alan J. Cohen, 

Samuel E. Cohen and Joel Cohen held short positions of 150 carlots, 144 carlots 

and 100 carlots, respectively. Respondent Ivar J. Blacker held no position. On 

March 4, respondent Samuel E. Cohen gave to F. J. Reardon, Inc. three orders 

calling for the sale of 100 carlots, 20 carlots and 74 carlots, respectively, or 

a total of 194 carlots. The three orders were executed on March 4, and in 

accordance with respondent Samuel E. Cohen's instructions, the 194 carlots were 

allocated as follows, 44 carlots to the Joel Cohen account, and the remaining 

150 carlots to the Ivar J. Blacker account. 

The respondents do not deny the facts upon which Mr. Stults' analysis is 

based and they offer no explanation with respect to these facts. 

Mr. Stults testified with respect to individual interviews which he had with 

respondents Ivar J. Blacker and Samuel E. Cohen on May 26, 1966, during the 

investigation which preceded the issuance of the complaint in this proceeding. 

According to Mr. Stults, respondent Blacker stated that he was an attorney 

and familiar with the rules and regulations promulgated under the Commodity 

Exchange Act (Tr. 48); that he had been associated with the Cohen family for 

many years and "considered himself to be nearly one of the family" (Tr. 49); and 

that there were "many ventures" in which he and the Cohens participated (Tr. 

51). Mr. Stults testified that respondent Blacker, "in describing the method 

which would be used in determining how the Cohen group was going to trade", 

stated that "each morning the Cohen group would meet"; that those attending 

these meetings were Samuel E. Cohen, Alan J. Cohen, Ivar J. Blacker, and, 

frequently, Joel Cohen when he was in town; that at these meetings "they would 

discuss the various business ventures, including the hotel operations, labor 

relations and commodity futures trading, and during this particular time 

[September 29, 1965, through May 10, 1966] it was the 1966 potato future"; that 

"the group would then decide which they would do, whether they would buy or 

whether they would sell in the May 1966 potato future"; and that "in the case of 

Mr. Samuel E. Cohen, if he had an opinion that was contrary to the group, that 

the others would let Mr. Cohen go his way and they would not take any position, 

rather than trade against him" (Tr. 49-50). Mr. Stults testified that he 

pointed out to respondent Blacker "the similarity between his trading and the 

trading of the Cohens"; and that respondent Blacker said the similarity resulted 
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from two causes, viz., the respondents used the same sources of information, and 

"We won't buck Sam" (Tr. 50). 

According to Mr. Stults, respondent Samuel E. Cohen stated in his interview 

that he, his sons, Alan and Joel, and Ivar J. Blacker were associates (Tr. 47); 

that the respondents discussed among themselves their trading in commodity 

futures (Tr. 45); and that "as a close-knit family he just wouldn't and didn't 

trade against his sons or associates and his associates and his sons 

 

didn't trade against him" (Tr. 46). Continuing, Mr. Stults testified that "he 

asked Mr. Cohen if it was conceivable that his sons could be trading on one side 

of the potato market and himself trading on the other side, that is, was it 

conceivable to him that Alan and Joel could be buying May potatoes at the time 

that he would be selling May potatoes or any other option"; that "Mr. Samuel E. 

Cohen got quite agitated and told me that he and his sons were a close-knit 

family and they didn't trade against each other"; that he (Stults) then asked; 

"Well, what would happen if you had one opinion, Mr. Cohen, and your sons had 

another opinion as to what you should be doing in the potato market, whether you 

should be buying or selling"; and that in reply "Mr. Cohen said, 'If I have one 

opinion and my sons have another, they don't trade or,' he said after a moment's 

hesitation, 'I don't trade'" (Tr. 44-46). 

Respondents Samuel E. Cohen, Alan J. Cohen and Ivar J. Blacker, testified in 

their own behalf (Tr. 97-113, 116). The testimony of respondents Samuel E. 

Cohen and Alan J. Cohen consists for the most part of general denials that the 

respondents had an agreement to trade in "unison". Respondent Ivar J. Blacker's 

testimony consists of a single statement: "I would like to state for the record 

that I have heard the testimony of Mr. Sam Cohen and Alan Cohen and that my 

testimony would be substantially the same" (Tr. 116). Obviously, such testimony 

has little probative value. 

The following excerpts from respondent Samuel E. Cohen's testimony are 

typical of the evidence given by him on direct examination (Tr. 100-101): 

Q. Did you ever have an agreement or a plan with the defendants in this case, 

the respondents in this case, to purchase or sell in unison? 

A. Oh, I never had agreement with none of them. 

Q. You've heard the testimony by the government's witnesses. 

A. I did, and it's not what they're saying. 

Q. There never has been any such agreement? 

A. Never, never, never. 

Q. Did you help finance some of these transactions? 

A. I never helped finance. The only time was if a margin call had come up 

and they didn't have the money, which happened many a time this past year 

especially, either my son or even you would ask me if I wouldn't loan you the 

money, which I've done many times. 

Similarly, respondent Alan J. Cohen testified (Tr. 108): 

Q. (By Mr. Blacker) Have we, or has the group that was mentioned here, ever 

planned or agreed between them to purchase in unison or to sell in unison at 

daily rates, or so forth, at any particular time? 

A. No, sir. No, sir. Never. Never. 

Q. All right. 

A. We acted independently, and whenever anyone thought that he might do a 

certain purchase that particular day we never decided just then and there. It 
Page 9 

might have been at let's say 10:00 o'clock or 12:00 o'clock before the market 

closed, I would get an urge and call up my father if he had the WATS line, 

because like he said, it's very difficult to get that line, and there's a lot of 

times I call up dad and say please, dad get my call in, I want to get 40 or 50 

cars. I just felt like the market was right. 

On direct examination, respondent Samuel E. Cohen made no reference to his 

interview with Mr. Stults. However, when asked on cross examination whether he 

told Mr. Stults that "I don't trade against my family or my partners and they 

don't trade against me", he replied: "That's right. I'm still saying it all the 

way through. I wouldn't go against them nor they me. We wouldn't be fighting 

one another. If I was on the market and I kept buying and they kept selling, 

naturally, we're fighting each other. I'd rather not trade. Many a day I 

didn't trade and they traded, or they traded and I didn't" (Tr. 102-103). 

On cross examination, respondent Alan J. Cohen could not remember any market 

factor which influenced him in his trading (Tr. 110-111). When asked what type 

of potatoes were deliverable on the May 1966 potato future, he replied (Tr. 

112): "I presume potatoes that are considered Irish potatoes, that are planted 

around certain times of the year." When asked when the May 

 

potato future expired, his testimony was as follows (Tr. 111-112): 

A. When did it expire, sir? 

Q. Yes. 

A. Oh, about December. 

Q. December? 

A. Well, maybe it was in January, '66. 

Q. It expired in January of 1966? 

A. Approximately about that time. 

Needless to say, this is hardly the type of testimony which one would expect 

from a substantial trader who acted independently on the basis of his own 

judgment. Especially is this true in view of the fact that at the opening of 

trading on May 9, 1966, the penultimate day of trading in the May 1966 potato 

future, respondent Alan J. Cohen held a position of 150 carlots in that future 

(Complainant's Exhibit 47). 

The facts and circumstances in this record compel the conclusion that, as 

charged in the complaint, the respondents acted pursuant to an agreement or 

understanding in making the trades and holding the positions described in the 

Findings of Fact. The concerted character of the respondents' trading is 

glaringly revealed by a long chain of circumstances, the concurrence of which 

could not possibly have been sheer coincidence. The Assistant Director of the 

Compliance Division of the Commodity Exchange Authority, who analyzed the 

respondents' trading, concluded, on the basis of facts which the respondents do 

not dispute, that they followed "a very set pattern" in their trading. 

Examination of the facts fully substantiates such a conclusion. Admittedly, the 

respondents had an understanding that they would trade on the same side of the 

market, and the facts in evidence show that the understanding was even broader. 

It is difficult to imagine more convincing evidence of a "team" operation than 

that presented in this record. The evidence is sufficient to sustain the 

charges even without the admission of an understanding for it is axiomatic that 

an illegal agreement or arrangement may be shown by a course of conduct. 

American Tobacco Company v. United States, 328 U.S. 781, 809; United States v. 

Paramount Pictures, 334 U.S. 131, 142; United States v. Masonite Corporation,

316 U.S. 265; 275. 

 
Page 10 

"What parties do over a course of time is surely as demonstrative of their 

understanding and intent as what they say. It is settled, of course, that an 

agreement may be found in a course of dealings as well as through exchange of 

words." United States v. Pullman Company, 50 F.S. 123, 134 (D.C. Pa.). "Where 

there is uniformity of action showing an initial desire or threat to seek or 

compel a certain result, there is sufficient evidence of agreement, unless there 

is persuasive evidence to the contrary. Similarity of action by interested 

parties is not necessarily to be regarded as sheer coincidence." Johnson v. J. 

H. Yost Lumber Co., 117 F.2d 53, 57 (C.A. 8), citing Federal Trade Commission v. Pacific Paper Ass'n, 273 U.S. 52, Eastern States Lumber Ass'n v. United States,

234 U.S. 600, and Vitagraph, Inc. v. Perelman, 95 F.2d 142 (C.A. 3). 

III 

The violations found herein were deliberate and serious and justify 

substantial sanctions. The primary purpose of the Commodity Exchange Act is to 

prevent or minimize unreasonable price fluctuations which are detrimental to 

both the producer and the consumer. The speculative limits on trading and 

positions have been established as a basic part of the measures designed to 

achieve that purpose. Considering all of the circumstances of this case, it is 

believed that in order to effectuate the purposes of the Commodity Exchange Act, 

each of the respondents should be denied all trading privileges on contract 

markets for a period of 90 days. 

All contentions of the parties presented for the record have been considered 

and, whether or not specifically mentioned herein, any suggestions, requests, 

etc., inconsistent with this decision is denied. 

PROPOSED ORDER

Effective 20 days after receipt of a copy hereof all contract markets shall 

refuse all trading privileges to Samuel E. Cohen, Alan J. Cohen, Joel Cohen and 

Ivar J. Blacker for a period of ninety (90) days, such refusals to apply to all 

trading done and positions held directly and also to all trading done and 

positions held indirectly through persons or firms owned or controlled by any of 

the respondents. 

A copy of this decision and order shall be served on each of the parties and 

on each contract market. 

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