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Commodity Futures Trading Commission 

CEA CASES 

NAME: H. SACKS & SONS AND JULIUS SACKS 

CITATION: 17 Agric. Dec. 424 

DOCKET NUMBER: 80 

DATE: MAY 27, 1958 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 5447) 

In re H. SACKS & SONS, a partnership, and JULIUS SACKS. CEA Docket No. 80. 

Decided May 27, 1958. 

Violation of Reporting Provisions -- Denial of Trading Privileges -- Consent 

Order

Respondents admitted violating the reporting requirements of the act and 

consented to an order denying them trading privileges on all contract markets 

for a 30-day period. 

Mr. Benjamin M. Holstein, for Commodity Exchange Authority. Respondents pro se. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

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

U.S.C. 1952 ed., Chapter 1), instituted by a complaint and notice of hearing 

issued under section 6(b) of the act (7 U.S.C. 1952 ed., § 9) on March 6, 1958, 

by the Assistant Secretary of Agriculture. The complaint charges that the 

respondent partnership failed to submit reports concerning its transactions in 

potato futures on 34 occasions within a period of approximately five months, in 

violation of section 4i of the act (7 U.S.C. 1952 ed., § 6i) and sections 6.10, 

6.11, 6.12, and 6.21 of the rules and regulations thereunder (17 CFR 6.10, 6.11, 

6.12, 6.21). The complaint alleges that these violations were wilful because 

the respondents had previously been fully informed of the reporting requirements 

and had also been informed in writing that their continued delinquency in 

connection with reporting requirements could result in formal action. 

No hearing has been held. On May 8, 1958, the respondents filed a document 

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

admit the facts alleged in the complaint, waive hearing on the charges, and 

consent to the entry of the order hereinafter set forth. 

FINDINGS OF FACT

1. Respondent H. Sacks & Sons was at all times material herein and is now a 

partnership with offices and principal place of business located at East Quogue, 

Long Island, New York. The said partnership enjoys membership trading 

privileges on the New York Mercantile Exchange. Respondent Julius Sacks was at 

all times material herein and is now a member of the respondent partnership, and 

controlled and was responsible for execution of the partnership transactions 

hereinafter described. The said Julius Sacks was at all times material herein a 

member of the New York Mercantile Exchange. 

2. The New York Mercantile Exchange has been at all times material herein and 

is now a duly designated contract market under the Commodity Exchange Act. 
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3. On each day during the period from September 20, 1957, through February 

12, 1958, the respondent partnership had a net short or net long open contract 

position in potato futures on the New York Mercantile Exchange which ranged from 

25 carlots to 57 carlots in a single future. By reason of the fact that such 

quantities were equal to or in excess of 25 carlots, said respondent partnership 

was in reporting status and was required to report to the Commodity Exchange 

Authority with respect to all transactions executed and all open contract 

positions held for its account in all potato futures on all boards of trade 

(exchanges) during the said period, and with respect to all such transactions by 

reason of which said respondent's position was reduced below reporting levels, 

as provided in section 4i of the Commodity Exchange Act (7 U.S.C. 1952 ed., § 

6i) and sections 6.10, 6.11, 6.12, and 6.21 of the rules and regulations 

thereunder (17 CFR, 6.10, 6.11, 6.12, 6.21). 

4. On thirty-four (34) business days within the period specified in paragraph 

3 hereof, while respondent partnership was 

in reporting status as therein described, and on the business day immediately 

thereafter, February 13, 1958, when respondent's position was reduced below 25 

carlots, transactions in potato futures on the New York Mercantile Exchange were 

executed for its account, but said respondent partnership has failed and refused 

to report to the Commodity Exchange Authority with respect to such transactions, 

as required under the aforesaid provisions of the Commodity Exchange Act and the 

rules and regulations. 

5. On numerous occasions dating as far back as September 23, 1948, and 

continuing up to October 8, 1957, officials of the Commodity Exchange Authority 

not only informed said respondent of the reporting requirements under the 

Commodity Exchange Act and regulations but also found it necessary to 

communicate with said respondent, in writing and by telephone, directing 

attention to respondent's (a) failure to file reports required to show 

reportable transactions and positions in potato futures on contract markets; (b) 

filing of reports showing cumulative trades and positions for an entire month 

instead of filing a report for each day on which trades or transactions were 

made while in a reporting status, as required by the regulations; and (c) filing 

incorrect reports. Respondent partnership was also informed in writing by the 

Administrator of the Commodity Exchange Authority of its delinquencies in 

submitting reports, that such delinquencies were a continuing violation of the 

law, and that continuing failure in this regard could result in the institution 

of formal proceedings directed toward denial of trading privileges on contract 

markets. On one occasion, respondent Julius Sacks wrote a letter to the New 

York office of the Commodity Exchange Authority with respect to the filing of 

daily reports. In the circumstances, respondents H. Sacks & Sons and Julius 

Sacks were fully aware of their obligations under the Commodity Exchange Act and 

the rules and regulations with respect to the filing of required reports, and 

that failure to submit such reports constituted a knowing and wilful violation 

of section 4i of the Commodity Exchange Act and sections 6.10, 6.11, 6.12, and 

6.21 of the rules and regulations thereunder. 

CONCLUSIONS

Section 4i of the Commodity Exchange Act provides as follows: 

Sec. 4i. It shall be unlawful for any person to make any contract for the 

purchase or sale of any commodity for future delivery on or subject to the rules 

of any contract market unless such person shall report or cause to be reported 

to the properly designated officer in accordance with the rules and regulations 

of the Secretary of Agriculture . . . (2) whenever such person shall directly or 

indirectly have or obtain a long or short position in any commodity or in any 

future of such commodity, equal to or in excess of such amount as shall be fixed 

from time to time by the Secretary of Agriculture . . . 
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Section 6.10 of the rules and regulations provides as follows: Sec. 6.10 

Persons holding or controlling open contracts of specified size; reports on Form 

603. Every person who holds or controls open contracts in any one potato future 

on any one contract market which equal or exceed the amount fixed by the 

Secretary of Agriculture (in sec. 6.21 hereof) for reporting purposes under 

section 4i(2) of the Commodity Exchange Act shall report to the Commodity 

Exchange Authority on Form 603. Such report shall be made daily: . . . 

With respect to potato futures, the amount fixed by the Secretary of 

Agriculture for reporting purposes under these provisions is 25 carlots (17 CFR 

6.21). Other sections of the rules and regulations prescribe the time for 

filing reports and the information to be furnished (17 CFR 6.11, 6.12). 

The respondents have admitted the facts alleged in the complaint, which have 

been adopted as the findings of fact in this proceeding. It thus appears that 

they failed to file reports on 35 occasions when they were required to do so. 

The failure to file complete, correct, and accurate reports when and as required 

is contrary to and constitutes a violation of the provisions of the act and the 

regulations. The number of instances involved and the fact that the respondents 

were given prior warning justify the conclusion that these violations were 

wilful. The complainant has recommended that the stipulation which the 

respondents have submitted under section 0.4(b) of the rules of practice be 

accepted and that the order to which they have consented be issued. It is so 

concluded. 

ORDER

Effective November 3, 1958, all contract markets shall refuse 

all trading privileges to H. Sacks & Sons and Julius Sacks, for a period of 

thirty (30) days, such refusal to apply to all trading done and positions held 

by them or either of them, and also to all trading done and positions held 

indirectly through persons owned or controlled by them or either of them, or 

otherwise. 

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

each contract market. 

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