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Commodity Futures Trading Commission 

CEA CASES 

NAME: BOUDEN, CLAY AND COMPANY, C. WHITNEY BOUDEN AND GEORGE W. CLAY, JR. 

DOCKET NUMBER: STIPULATION 9 

DATE: APRIL 6, 1949 

DOCUMENT TYPE: STIPULATION OF COMPLIANCE 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Bouden, Clay and Company, C. Whitney Bouden and George W. Clay, Jr. New 

Orleans, Louisiana 

Stipulation of Compliance Under the Commodity Exchange Act No. 9 

WHEREAS, the Secretary of Agriculture has reason to believe that Bouden, Clay 

and Company, C. Whitney Bouden, and George W. Clay, Jr., have violated the 

Commodity Exchange Act, as amended, and the rules and regulations of the 

Secretary of Agriculture promulgated thereunder; and 

WHEREAS, no complaint has been filed with respect to said violation and the 

above-mentioned persons desire to enter into a stipulation pursuant to the 

provisions of Section 0.4 (a) of the rules of practice under the Commodity 

Exchange Act; Now, therefore, the said Bouden, Clay and Company, C. Whitney 

Bouden, and George W. Clay, Jr., admit the following facts are true: 

(1) At all times mentioned herein, Bouden, Clay and Company was, and is now, 

a partnership composed of C. Whitney Bouden and George W. Clay, Jr., organized 

under the laws of the State of Louisiana, with clearing house and membership 

trading privileges on the New Orleans Cotton Exchange, a contract market duly 

designated as such by the Secretary of Agriculture under the Commodity Exchange 

Act. 

(2) Bouden, Clay and Company was at all times mentioned herein and is now, 

registered with the Secretary of Agriculture as a futures commission merchant 

under the Commodity Exchange Act. C. Whitney Bouden and George W. Clay, Jr., 

were, and are now, registered with the Secretary of Agriculture as floor brokers 

under the Commodity Exchange Act. 

(3) At all times mentioned herein, E. Kirby Newburger was a member of the New 

Orleans Cotton Exchange and a partner in the firm of Kohlmeyer, Newburger and 

Company, which firm was registered with the Secretary of Agriculture as a 

futures commission merchant under the Commodity Exchange Act, and enjoyed 

clearing house and membership privileges on the New Orleans Cotton Exchange. 

(4) Kohlmeyer, Newburger and Company (now Kohlmeyer and Company) was at the 

time pertinent to this stipulation, and is now, a large and well thought of 

cotton firm in the City of New Orleans. E. Kirby Newburger was, at the time of 

the transactions mentioned in this stipulation, considered a man of substantial 

financial strength, enjoying the confidence of the cotton trade and of Bouden, 

Clay and Company and its members. 

(5) Sometime in January 1948 E. Kirby Newburger approached George W. Clay, 

Jr., and requested that he be given discretion to trade for the house account of 

Bouden, Clay and Company. He pointed out that such discretion would be of 

assistance to him in executing contra orders of customers of Kohlmeyer, 
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Newburger and Company. George W. Clay, Jr., on behalf of Bouden, Clay and 

Company acceded to this suggestion and it was agreed that there would be entered 

upon the records of Bouden, Clay and Company such transactions as E. Kirby 

Newburger reported he had executed pursuant to this discretionary power. In 

connection with such transactions it was understood that E. Kirby Newburger 

would protect Bouden, Clay and Company against financial loss. 

(6) E. Kirby Newburger, during January, February, March and April 1948, 

reported to Bouden, Clay and Company that quantities of cotton futures had been 

bought from or sold to Bouden, Clay and Company pursuant to the agreement above 

described, and Bouden, Clay and Company entered these transactions on its books. 

(7) Among the transactions reported by E. Kirby Newburger as described in 

paragraph (6) above, were included certain transactions in which it was 

indicated that E. Kirby New-burger had bought cotton futures from, or sold 

cotton futures to, George W. Clay, Jr., acting for the house account of Bouden, 

Clay and Company, and George W. Clay, Jr. caused such transactions to be entered 

on the books of Bouden, Clay and Company; WHEREAS, in truth and in fact, George 

W. Clay, Jr., had not, in connection with such transactions, traded with E. 

Kirby Newburger and such transactions had merely been entered by E. Kirby 

Newburger and by Bouden, Clay and Company without actual execution. 

For example, on April 13, 1948, E. Kirby Newburger reported to Bouden, Clay and 

Company that he had bought from George W. Clay, Jr., acting for Bouden, Clay and 

Company, 200 bales of New Orleans July cotton futures at 36.31 cents per pound, 

and that he had sold to George W. Clay, Jr., acting for Bouden, Clay and 

Company, 200 bales of New Orleans July cotton futures at 36.70 cents per pound. 

The difference of .39 cents per pound between these two trades resulted in a 

loss in the house account of Bouden, Clay and Company. Bouden, Clay and Company 

has been advised by the Commodity Exchange Authority that the purpose and effect 

of this transaction and other transactions of a similar nature was to transfer 

funds from the house account of Bouden, Clay and Company to the personal trading 

account of E. Kirby Newburger on the records of Kohlmeyer. Newburger and 

Company. 

(8) On or about April 16, 1948, Mr. H. S. Kohlmeyer of the firm of Kohlmeyer, 

Newburger and Company, informed C. Whitney Bouden and George W. Clay, Jr. that, 

in his opinion, E. Kirby Newburger was using Bouden, Clay and Company as a dupe 

to get a name on the other side of trades of customers of Kohlmeyer, Newburger 

and Company. C. Whitney Bouden and George W. Clay, Jr. then informed Mr. 

Kohlmeyer that E. Kirby Newburger would no longer be permitted to trade for the 

house account of Bouden, Clay and Company, and the above described agreement was 

then 

terminated and no further trades were made. Thereafter, on or about June 1, 

1948, C. Whitney Bouden, on behalf of Bouden, Clay and Company, voluntarily went 

to Mr. W. D. Espy, of the Commodity Exchange Authority, in New Orleans, and told 

him of the conversation which he had had with Mr. H. S. Kohlmeyer, and of the 

fact that Bouden, Clay and Company had immediately withdrawn from E. Kirby 

Newburger the permission to trade for the Bouden, Clay and Company house 

account. He also stated to Mr. Espy that inasmuch as Newburger had been doing 

business for Bouden, Clay and Company, Bouden, Clay and Company and the members 

of that firm wishes to say that the records of Bouden, Clay and Company were 

open to such inspections and examinations as the CEA might care to make Mr. 

Bouden further told Mr. Espy that Bouden, Clay and Company had had the greatest 

confidence in E. Kirby Newburger and had had no reason to suspect that any 

transactions made by him were out of order, and that he felt that Bouden, Clay 

and Company had been doped into an embarrassing position through misplaced 

confidence, personal friendship and long continued business association. 
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(9) C. Whitney Bouden was aware of the arrangement described in paragraph (5) 

above and of the entries made on the books of Bouden, Clay and Company pursuant 

thereto. 

In addition to admitting the foregoing facts, Bouden, Clay and Company, C. 

Whitney Bouden, and George W. Clay, Jr., agree to discontinue and desist from 

all acts and practices which are in violation of the Commodity Exchange Act, as 

amended, and the rules and regulations promulgated thereunder, and further agree 

that this stipulation shall be admissible as evidence of acts and practices in 

violation of the said Commodity Exchange Act, as amended, and the rules and 

regulations promulgated thereunder, in any proceeding brought against this firm 

or its partners in connection with any subsequent violation of the said Act and 

regulations. 

Done, at Washington, D. C., this 6th day of April 1949 

/s/ Bouden Clay & Co. 

Bouden, Clay and Company 

By /s/ C. W. Bouden 

/s/ C. Whitney Bouden C. Whitney Bouden 

/s/ George W. Clay, Jr. 

George W. Clay, Jr. 

Witnessed by: 

/s/ J. M. Mehl 

/s/ Benj. H. Holstein 

LOAD-DATE: June 16, 2008 
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