Page 1 

Commodity Futures Trading Commission 

CEA CASES 

NAME: COWEN & CO. 

CITATION: 27 Agric. Dec. 338 

DOCKET NUMBER: 152 

DATE: MARCH 27, 1968 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 11,684) 

In re COWEN & Co. CEA Docket No. 152. Decided March 27, 1968. 

Segregated funds -- Failure to prepare records -- Denial of trading 

privileges -- Suspension of registration -- Stipulation

Respondent's failure to prepare daily records of customers' funds held in 

segregated accounts is a violation of the act for which suspension of 

registration and the denial of trading privileges on the contract markets for a 

period of 10 days are ordered. However, these sanctions are not to become 

effective unless respondent should be found in violation within a two-year 

period. 

Earl L. Saunders for Commodity Exchange Authority. 

Jacob Imberman, of Proskauer Rose Goetz & Mendelsohn, New York, N. Y., for 

respondent. 

Decision by Thomas J. Flavin, Judicial Officer

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). The respondent, a partnership registered 

as a futures commission merchant under the Commodity Exchange Act, is charged 

with violating section 4d of the act (7 U.S.C. 6d) and section 1.32 of the 

regulations thereunder (17 CFR 1.32). No hearing has been held with respect to 

this proceeding. On March 11, 1968, the respondent submitted a stipulation 

under section 0.4(b) of the rules of practice (17 CFR 0.4(b)), in which it 

admits "for the purposes of this proceeding and for such purposes only" the 

facts hereinafter set forth, waives hearing, and consents to the entry of the 

order contained herein. 

FINDINGS OF FACT

1. The respondent, a partnership with offices at 45 Wall Street, New York, 

New York, is now and was at all times mentioned herein a registered futures 

commission merchant under the Commodity Exchange Act. 

2. From January 26 through November 1, 1967, the respondent, acting in the 

capacity of futures commission merchant, carried accounts for five customers who 

traded in commodity futures subject to the provisions of the Commodity Exchange 

Act and regulations. During this period the respondent handled 22 transactions 

for the five customers. At all times material herein, the respondent maintained 

in segregated accounts sufficient funds to pay all the credits and equities due 

to its customers. However, during the same period, the respondent did not make 

any computation or permanent record, as of the close of the market on each 

business day, of the amount of money, securities, and property of customers 

required to be held in segregation in accordance with the provisions of section 
Page 2 

4d of the Commodity Exchange Act (7 U.S.C. 6d). During November and December, 

1965, the Commodity Exchange Authority had communicated with the respondent 

because of the respondent's failure to prepare and maintain a daily record of 

customers' funds required to be held in segregation. On January 6, 1966, the 

Director of the Authority's Accounting and Licensing Division had written a 

letter to the respondent calling attention to its delinquencies in that respect, 

and stating that the respondent would be afforded an opportunity to bring itself 

into compliance. 

CONCLUSIONS

By reason of the facts set forth in the Findings of Fact, it is concluded 

that the respondent willfully violated section 4d of the Commodity Exchange Act 

and section 1.32 of the regulations, as charged in the complaint. 

The complainant states that the administrative officials of the Commodity 

Exchange Authority have carefully considered the proposed stipulation and the 

terms of the order to which the respondent proposes to consent. It is the 

opinion of the administrative officials that in the circumstances the proposed 

order would be adequate, and that the prompt entry of such an order would 

constitute a satisfactory disposition of the case, serve the public interest, 

and effectuate the purposes of the Commodity Exchange Act. The complainant 

recommends, therefore, that the stipulation and waiver be accepted and that the 

proposed order be issued. It is so concluded. 

ORDER

The registration of respondent Cowen & Co. as a futures commission merchant 

is suspended for a period of ten (10) days, and all contract markets shall 

refuse all trading privileges to respondent Cowen & Co. for a period of ten (10) 

days, Provided, However, that the aforesaid suspension of registration and 

refusal of trading privileges shall not become effective unless, after complaint 

and hearing in accordance with established procedure, respondent Cowen & Co. 

should be found to have violated the Commodity Exchange Act within two years 

from the date of entry of this order, in which event the Secretary of 

Agriculture may, without further notice to respondent Cowen & Co., issue a 

supplemental order making effective forthwith the aforesaid suspension of 

registration and refusal of trading privileges, which shall be in addition to 

any sanction which may be imposed as a result of such subsequent violation. 

A copy of this Decision and Order shall be served on each of the parties and 

on each contract market. 

LOAD-DATE: June 8, 2008 
Page 3