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Commodity Futures Trading Commission 

CEA CASES 

NAME: PEERS AND COMPANY 

CITATION: 13 Agric. Dec. 597 

DOCKET NUMBER: 61 

DATE: JUNE 28, 1954 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 3925) 

PEERS AND COMPANY et als. CEA Docket No. 61. Decided June 28, 1954. 

Suspension of Registration -- Violation of Act -- Wash or Fictitious Sales -- 

Consent Order

Where respondents caused the execution of fictitious trades on the New York 

Cotton Exchange in violation of the act, and where respondent Peers and Company 

admitted the facts alleged and consented to the entry of an order suspending its 

registration, the company's registration as a future's commission merchant was 

ordered suspended for a period of fifteen days. 

Mr. Benjamin M. Holstein for Commodity Exchange Authority. Mr. Albert I. 

Collens, of New York, New York, for respondents Peers and Company and Henry M. 

Peers, Jr. 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 I), instituted by a complaint issued under section 6 (b) of the act (7 

U.S.C. 9) on February 16, 1954, 

by the Acting Secretary of Agriculture, hereinafter called the complainant. 

The complaint charges that the respondents caused the execution of wash or 

fictitious trades on the New York Cotton Exchange, a contract market, in 

violation of section 4c of the act (7 U.S.C. 6c). The charges are based upon 

allegations that respondent Leon Salkind opened commodity futures trading 

accounts with respondent Peers and Company for the partnership respondent 

Leading Embroidery Company and for the corporate respondent Smitherman Cotton 

Mills, Incorporated, that on three occasions thereafter respondent Salkind 

ordered the purchase of a specified quantity of cotton futures for the account 

of the corporation and simultaneously ordered a sale of the same quantity of the 

same future for the account of the partnership, or vice versa, that such trades 

were executed by causing one firm to buy from the other, that respondent Peers 

and Company accepted, transmitted, and recorded the execution of these orders 

with knowledge of the fact that respondent Salkind controlled the trading of 

both firms, and that subsequently, upon directions from respondent Salkind, 

respondent Peers and Company applied the credit balance in the corporation 

account against the debit balance in the partnership account, after which both 

accounts were closed. 

An answer was filed on behalf of respondents Peers and Company and Henry M. 

Peers, Jr., in which these respondents admitted the material allegations in the 

complaint, except that they denied knowledge by respondent Peers of the fact 

that the trading in both accounts was controlled by respondent Salkind. No 
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answer or other communication was received from or on behalf of respondents 

Leading Embroidery Company, Smitherman Cotton Mills, Incorporated, or Leon 

Salkind. 

The hearing opened in New York on June 8, 1954, before referee Jack W. Bain, 

of the Office of Hearing Examiners, United States Department of Agriculture. 

Respondents Peers and Company, and Henry M. Peers, Jr., were represented by 

Albert I. Collens, of New York, New York. Benjamin M. Holstein of the 

Solicitor's Office appeared for the complainant. There was no appearance by or 

on behalf of the other three respondents. 

After the hearing opened and prior to the taking of testimony, respondents 

Peers and Company and Henry M. Peers, Jr., by their counsel, admitted the facts 

alleged in the complaint, waived further hearing, waived service upon them of a 

referee's report, consented to the entry of an order suspending the registration 

of 

respondent Peers and Company as a futures commission merchant for a period of 

fifteen (15) days, and requested that such order be issued as expeditiously and 

be made effective as soon as possible. The referee then stated that he would 

certify the matter to the Judicial Officer without any further formal document 

by the referee, for issuance of the order to which these respondents had 

consented, and indicated that he would file a report with respect to the three 

remaining respondents. 

The order to which respondents Peers and Company and Henry M. Peers, Jr. have 

consented and which the referee and the complainant have recommended will be 

issued, with findings of fact adopted from the material facts alleged in the 

complaint. 

FINDINGS OF FACT

1. Respondent Peers and Company, 76 Beaver Street, New York, New York, is a 

sole proprietorship, owned and managed by resondent Henry M. Peers, Jr. At all 

times material to this decision and order, the said Peers and Company was a 

registered futures commission merchant under the Commodity Exchange Act and a 

clearing member of the New York Cotton Exchange. 

2. At all times material to this decision and order, the New York Cotton 

Exchange was a duly designated contract market under the Commodity Exchange Act. 

3. On or about September 10, 1952, respondents Leading Embroidery Company and 

Smitherman Cotton Mills, Incorporated, acting through respondent Leon Salkind, 

each opened a regulated commodity account with respondent Peers and Company. 

4. On or about September 15, 1952, respondent Leon Salkind ordered respondent 

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 simultaneously ordered the said Peers and Company to sell 4,000 bales of 

March 1953 cotton futures for the account of respondent Smitherman Cotton Mills, 

Incorporated. Respondent Peers and Company simultaneously transmitted both 

orders to Aubrey Wolford, a registered floor broker under the Commodity Exchange 

Act, for execution on the New York Cotton Exchange, and the said Aubrey Wolford, 

acting as floor broker on both sides of each of the said orders, purchased 4,000 

bales of March 1953 cotton futures at 39.31 cents per pound on the floor of the 

New York Cotton Exchange and, as the opposite side of such purchase, sold the 

same quantity of the same future at the same price. The said 

Aubrey Wolford reported the above described purchase and sale to respondent 

Peers and Company, and the said Peers and Company entered the transactions in 

its books in the respective accounts of the respondent partnership and the 

respondent corporation, and notified respondent Leon Salkind that his orders had 

been executed. 
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5. On or about November 12, 1952, respondent Leon Salkind ordered respondent 

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, 

Incorporated, and simultaneously ordered the said Peers and Company to sell 

4,000 bales of March 1953 cotton futures on the said exchange for the account of 

respondent Leading Embroidery Company. Respondent Peers and Company 

simultaneously transmitted both orders to the said Aubrey Wolford for execution 

on the New York Cotton Exchange, and the said Aubrey Wolford, acting as floor 

broker on both sides of each of the said orders, purchased 3,500 bales of March 

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

Exchange and, as the opposite side of such purchase, sold the same quantity of 

the same future at the same price. The said Aubrey Wolford reported the above 

described purchase and sale to respondent Peers and Company, and the said Peers 

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

the respondent corporation and the respondent partnership, and notified 

respondent Leon Salkind that his orders had been executed. 

6. On or about November 12, 1952, respondent Leon Salkind ordered respondent 

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, 

Incorporated, and simultaneously ordered the said Peers and Company to sell 

4,000 bales of May 1953 cotton futures on the said exchange for the account of 

respondent Leading Embroidery Company. Respondent Peers and Company 

simultaneously transmitted both orders to the said Aubrey Wolford for execution 

on the New York Cotton Exchange, and the said Aubrey Wolford, acting as floor 

broker on both sides of each of the said orders, purchased 4,000 bales of May 

1953 cotton futures at 36.16 cents per pound on the floor of the New York Cotton 

Exchange and, as the opposite side of such purchase, sold the same quantity of 

the same future at the same price. The said Aubrey Wolford reported such 

purchase and sale to respondent Peers and Company, and the said Peers 

and Company entered the transaction in its books in the respective accounts of 

the respondent corporation and the respondent partnership, and notified 

respondent Leon Salkind that his orders had been executed. 

7. Respondent Peers and Company accepted the orders described in paragraphs 

4, 5, and 6 with knowledge of the fact that respondent Leon Salkind controlled 

the trading in the accounts of the respondent partnership and respondent 

corporation. 

8. At all times between September 15, 1952, and September 21, 1952, and at 

all times between September 23, 1952, and February 19, 1953, the books of 

respondent Peers and Company showed that the account of respondent Leading 

Embroidery Company had a deficit in excess of $ 10,000, the maximum amount of 

credit permitted to be extended by a member of the New York Cotton Exchange 

under the rules of the said exchange. No margin funds were deposited by 

respondent Leading Embroidery Company or by anyone else in its behalf during 

these periods. On October 23, 1952, and thereafter, such deficit exceeded $ 

100,000. The transactions of November 12, 1952, described in paragraphs 5 and 

6, closed out the open contract positions in both accounts and at the close of 

business on that day the account of respondent Leading Embroidery Company showed 

a debit balance of approximately $ 132,765 and the account of respondent 

Smitherman Cotton Mills, Incorporated, showed a credit balance of approximately 

$ 118,340. The said accounts remained in this status until on or about February 

19, 1953, at which time respondent Peers and Company, pursuant to directions 

from respondent Leon Salkind, applied the said credit balance in the account of 

respondent Smitherman Cotton Mills, Incorporated, to the debit balance in the 

account of respondent Leading Embroidery Company. Shortly thereafter both of 

the accounts were closed. 

9. The cotton futures transactions described in paragraphs 4, 5, and 6 could 

be used for hedging transactions in interstate commerce in cotton or the 

products or by-products thereof, or determining the price basis of transactions 
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in interstate commerce in cotton, or delivering cotton sold, shipped, or 

received in interstate commerce. 

CONCLUSIONS

Respondent Peers and Company accepted the orders in question with knowledge 

of the fact that respondent Leon Salkind controlled the trading of both firms, 

and Peers and Company confirmed 

the execution of the trades and entered them in its books when it knew that they 

had been executed by "crossing," that is, by causing one firm to buy from the 

other. Under the circumstances, such transactions were wash sales or fictitious 

sales within the meaning 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). 

ORDER

Effective ten (10) days after the date of this order, the registration of 

Peers and Company as a futures commission merchant is suspended for a period of 

fifteen (15) days. 

A copy of this decision and order shall be sent by registered mail to 

respondents Peers and Company and Henry M. Peers, Jr., and to each contract 

market under the act. 

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