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Commodity Futures Trading Commission 

CEA CASES 

NAME: GEORGE SIROTA AND SONS, GEORGE SIROTA, NORMAN L. SIROTA, BENJAMIN SIROTA, 

HARRY A. ASPINWALL, AND DYKE CULLUM 

CITATION: 12 Agric. Dec. 825 

DOCKET NUMBER: 54 

DATE: JULY 31, 1953 

DOCUMENT TYPE: DECISION AND ORDER 

UNITED STATES DEPARTMENT OF AGRICULTURE

BEFORE THE SECRETARY OF AGRICULTURE

AGRICULTURE DECISIONS

(No. 3563) 

In re GEORGE SIROTA AND SONS, GEORGE SIROTA, NORMAN L. SIROTA, BENJAMIN SIROTA, 

HARRY A. ASPINWALL, AND DYKE CULLUM. CEA Docket No. 54. Decided July 31, 1953. 

Suspension of Registration -- Wilfully Evading Reporting Requirements -- 

Wilful Failure to Make Reports -- Refusal of Trading Privileges

For wilfully evading the reporting requirements of the act and the 

regulations thereunder, the registration under the act of the respondent 

partnership as a futures commission merchant is suspended for 10 days; the 

registrations under the act of N. L. S., B. S. and H. A. as floor brokers are 

suspended for 10 days on the ground that these respondents were involved in the 

violations; and for wilful failure to make reports required by the act and the 

regulations thereunder, all contract markets shall refuse all trading privileges 

to respondent D. C. for a period of 10 days. 

Evil Intent as Not Essential Element in Violation of Act

Violations of the act and regulations need not possess as an indispensable 

ingredient, which the respondents apparently argue, some sort of malevolence, 

evil intent, or motive to hide someone else's violation of the act. 

Meaning of Term Wilfulness

Wilfulness means "no more than that the person charged with the duty knows 

what he is doing" and it "does not mean that, in addition, he must suppose that 

he is breaking the law." 

Mr. Benjamin M. Holstein for Commodity Exchange Authority. Mr. Donald Marks of 

Baer, Marks, Friedman, Berliner & Klein, of New York, New York, and Mr. Ben I. 

Melnicoff, of Washington, D. C., for respondents George Sirota and Sons, George 

Sirota, Norman L. Sirota and Benjamin Sirota. Mr. Thomas A. Sully, of New York, 

New York, for respondent Harry A. Aspinwall. Mr. Roy St. Lewis, of Washington, 

D. C., for respondent Dyke Cullum. Mr. John J. Curry, 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 1). The respondent firm, George 
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Sirota and Sons, is a registered futures commission merchant under the act. 

George, Norman L. and Benjamin Sirota are partners in the firm and each is 

registered as a floor broker under the act. Dyke Cullum is a trader who was a 

customer of George Sirota and Sons at the times pertinent to the proceeding and 

Harry A. Aspinwall is a registered floor broker under the act. Aspinwall acted 

as the agent or solicitor for George Sirota and Sons, however, and brought to 

George Sirota and Sons and serviced the trading accounts involved in the 

proceeding. 

Broadly outlining the situation presented in the proceeding for an 

understanding of what is to follow, the respondent partnership carried three 

trading accounts over a period of some months in 1950 in the names of (1) "Dyke 

Cullum," (2) "Kiki Cullum," and (3) "Jessica K. Jones." n1 The complaint alleges 

that on or about June 23, 1950, five long contracts of September 1950 soybean 

oil futures belonging to respondent Dyke Cullum were placed in the Kiki Cullum 

and Jessica K. Jones accounts so that the respondent Dyke Cullum's long position 

in the September future would not appear to be in reporting status. A charge of 

violating section 4i of the act and also the regulations under the act in this 

connection is made against the respondent partnership and respondent Dyke 

Cullum. 

n1 This account was apparently originally opened as the "J. K. Jones" 

account, changed a few hours later to "Jessica K. Jones" and later 

described on the contract ledger for the account as "Joycette K. Jones." It 

will be referred to as the "Jessica K. Jones" account. 

The complaint also charges misuse of customer's funds by the respondent 

partnership in that $ 3,500 of a deposit of $ 10,500 by respondent Dyke Cullum 

to margin his account was used to margin the account of Jessica K. Jones. 

A further charge is made against the respondent partnership and against 

respondent Aspinwall in connection with the Jessica K. Jones account. The 

complaint alleges violation of section 4 of the act and violation of section 

1.37 of the regulations under the act by failure to keep written records of the 

true parties to futures contracts because this account was opened without 

authority or consent of Miss Jones and because the trades entered in the account 

were for the benefit of a person other than Miss Jones. The complaint also 

alleges additional violations of section 4 of the act and section 1.37 of the 

regulations by the respondent partnership because of the five September 

contracts mentioned above being entered in the Kiki Cullum and Jessica K. Jones 

accounts when they should have been entered in the Dyke Cullum account. 

To make it abundantly clear, then, respondent Dyke Cullum is charged only 

with wilful failure to make reports required by section 4i of the act and 

sections 10.10, 10.11 and 10.21 of the regulations. Respondent Aspinwall is 

charged only with violation of section 4 of the act and section 1.37 of the 

regulations in connection with the opening of, and the trading in, the Jessica 

K. Jones account. The Sirota respondents are charged (1) with wilful failure to 

make reports in connection with respondent Dyke Cullum's holdings in the 

September 1950 soybean oil future in violation of section 4i of the act and 

sections 10.4, 10.5, 10.6 and 10.20 of the regulations, (2) with misuse of 

customer's funds in violation of section 4(d) (2) of the act and section 1.20 

and 1.22 of the regulations, (3) with failure to make a written record of the 

true names of parties to futures contracts in violation of section 4 of the act 

and section 1.37 of the regulations (a) by virtue of the Jessica K. Jones 

account and (b) by virtue of placing five September soybean oil contracts of 

respondent Dyke Cullum in the Kiki Cullum and Jessica K. Jones accounts. 

On November 28, 1950, an answer was filed on behalf of respondents George 

Sirota and Sons, George Sirota, Norman L. Sirota, and Benjamin Sirota. The 

answer admits that Harry A. Aspinwall was an authorized agent of the firm and 

that the firm carried accounts in the names Dyke Cullum, Kiki Cullum and Jessica 

K. Jones on the dates and in the quantities claimed, but denies failure to 

report or failure to maintain proper written records. Respondent Harry A. 
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Aspinwall filed a separate answer in which he denied the allegation that he was 

authorized to act as an agent for the respondent partnership in the acceptance 

of commodity futures orders and denied the charge of failure to evidence futures 

contracts by a proper written record. Respondent Dyke Cullum also filed a 

separate answer in which he denied failure to report as charged. 

John J. Curry, Officer of Hearing Examiners, United States Department of 

Agriculture, was assigned as referee and presided at the hearing which began in 

New York, New York, on January 30, 1951, and continued intermittently thereafter 

with sessions in New York and Washington, D. C., until March 16, 1951. 

Respondents George Sirota and Sons, George Sirota, Norman L. Sirota and Benjamin 

Sirota were represented by Donald Marks of Baer and Marks, New York, New York, 

and Ben I. Melnicoff of Washington, D. C. Respondent Harry A. Aspinwall was 

represented by Thomas A. Sully, New York, New York. Respondent Dyke Cullum was 

represented by Roy St. Lewis, Washington, D. C. 

Benjamin M. Holstein, Office of the Solicitor, United States Department of 

Agriculture, represented the complainant. After the hearing, suggested findings 

of fact, conclusions and orders, and briefs in support thereof, were filed by 

all parties to the proceeding. The referee issued a report recommending that 

the respondents be found to have violated the act as charged in the complaint 

except for the charge against the respondent partnership of misusing customer's 

funds which the complainant dropped after the hearing for lack of sufficient 

evidence. All respondents filed exceptions to the referee's report and oral 

argument was held before Judicial Officer in Washington, D. C., on February 26, 

1953. 

The Hearing Record

Although the hearing record is lengthy, much of the evidence does not have a 

direct bearing upon the issues projected by the complaint but deals with 

disputes between respondent Dyke Cullum and the other respondents. Cullum had a 

joint-venture deal with the Sirotas involving the purchase and sale of twenty 

tank cars of cottonseed oil as well as a regulated futures account in his own 

name. Differences between Cullum and the Sirotas as to the handling of the 

joint venture both in itself and considered together with the Dyke Cullum, the 

Kiki Cullum and the Jessica K. Jones futures trading accounts led to Cullum and 

the Sirotas taking their troubles to the Commodity Exchange Authority. A good 

deal of the hearing record is devoted to the airing of these differences rather 

than to the issues raised by the complaint. 

Evidence Concerning Failure to Report

Douglas B. Bagnell, Chief of the Compliance and Trade Practice Division, 

Commodity Exchange Authority, testified that, during the investigation 

preceeding the filing of the complaint, respondents Ben Sirota and George Sirota 

told him that respondent Dyke Cullum had given instructions for placing the five 

September soybean oil contracts in the Kiki Cullum and Jessica K. Jones accounts 

after these contracts had first been placed in the respondent Dyke Cullum's 

account. Bagnell said that the position of the Sirotas at that time was that 

the five contracts belonged to respondent Dyke Cullum, that they should have 

combined these five with the existing twelve contracts in Dyke Cullum's account 

and reported accordingly, but they had overlooked doing so perhaps due to a 

labor shortage in the office (tr. pp. 56-65). 

Bagnell also testified that Cullum told him during the course of the 

investigation that George Sirota persuaded him, Cullum, to 

switch five long July soybean oil contracts to September, that he, Cullum, did 

not want to do this because he, Cullum, already was twelve contracts long for 

September and that adding five more would put him two contracts over the 

reporting status, and that George Sirota suggested placing the five contracts in 
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the Kiki Cullum and Jessica K. Jones accounts. Bagnell said that Dyke Cullum 

admitted that he was conscious of the reporting requirements and knew that he, 

Cullum, should have filed the required reports (tr. pp. 16-17). 

Mr. Charles E. Robinson, in charge of the Trading and Reporting Section of 

the New York office of the Commodity Exchange Authority, testified for the 

complainant that respondent Cullum filed no reports. He also testified that the 

first reference to any reports by the respondent partnership occurred on July 

19, 1950, when respondent Benjamin Sirota called in person at the New York 

office of the Commodity Exchange Authority and informed Mr. Robinson that the 

positions in the Dyke Cullum, Kiki Cullum and Jessica K. Jones accounts should 

have been combined and reported, but that the firm had overlooked doing so 

because of labor difficulties. The reports were subsequently filed (tr. pp. 

358, 359, 366, 367). 

Evidence Concerning Failure to Maintain Record Showing True Names of Parties

Bagnell testified that, during the course of the investigation preceding the 

filing of the complaint, respondent Cullum denied opening the "J. K. Jones." 

account and said that respondent Aspinwall suggested to him, Cullum, that 

Aspinwall open an account in the name of Jessica K. Jones, a pseudonym for 

Joycette K. Jones, secretary or clerk of the United States Senate Committee on 

Agriculture and Forestry, for the purpose of making some money for the election 

campaign of Senator Elmer Thomas, then chairman of the committee. Bagnell 

testified that Cullum said that Aspinwall was trying to land a job with the 

committee and that Aspinwall thought that his chances would be enhanced by this 

move. Bagnell further testified that Cullum told him that he, Cullum, expressed 

the opinion that Miss Jones would not approve but to go ahead and see if he 

could work it out. Cullum, according to Bagnell, said that this was how the 

Jessica K. Jones account was instituted and he stated also, according to 

Bagnell, that the Kiki Cullum account belonged to his daughter and that he had 

nothing to do with the trading in either account (tr. pp. 72-75). 

Bagnell also testified concerning an interview with Miss Joycette 

K. Jones, who did not appear as a witness at the hearing, and Bagnell's 

memorandum of the interview dated September 22, 1950, was received in evidence 

without objection as Government Exhibit 16. The memorandum states: 

"I asked Miss Jones what she knew and what she was willing to tell me 

concerning the account carried in her name on the books of Sirota in New York. 

She said she knew nothing about it. 

"I then told her that on May 8, 1950, there had been a telephone call from 

her phone number, Atlantic 2930, at about 1 p.m. to Sirota's office and asked 

her what she would tell me about that phone call. She said she was at home ill 

on May 8 and that the night before Dyke Cullum had told her that she would get a 

phone call the next day from Sirota and had told her to give her name and give 

her address as care of Buck Jones, Odessa, Texas. She said that the next 

morning Harry Aspinwall called her from New York but that she did not give him 

the information as she was uncertain what it was all about. She then called 

Dyke Cullum in Chicago and he told her to call Sirota's office and give them the 

name and address. She then called Sirota's office and asked for Aspinwall. She 

was told that he was not in and the call was transferred to some one else whose 

name she did not get. She gave this person the name and address, as instructed 

by Dyke. 

"Some weeks later she was called by phone from Sirota's office and asked to 

put up additional margin in her account. She informed the person calling that 

she knew nothing about any account. 

"She stated that at no time had she ever given any orders in this account and 

had never received any money or put up any money. She said that a number of 

statements were mailed to her at the Odessa address and that she accepted and 
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opened them at first. She said that they were little slips of paper, apparently 

confirmations of trades. She said that recently she had stopped accepting this 

mail and that it had been returned unclaimed to Sirota." 

Respondent Dyke Cullum testified that George Sirota sought to recruit him for 

a "team" consisting of the Sirotas, Aspinwall and Ralph Moore, which was to 

control the soybean oil market and to get advance information from the United 

States Department of Agriculture and the ECA as to the Federal Government's 

plans with respect to the purchase and marketing of soybean oil (tr. 

pp. 498-501). He testified also that George Sirota wanted him to participate in 

the Jessica K. Jones account, that the account was opened by Aspinwall and the 

Sirotas to make money for Senator Thomas' campaign and that he, Cullum, had no 

responsibility for the account or that of Kiki Cullum (tr. pp. 523-53). 

On the other hand, respondent Aspinwall testified that he was instructed over 

the telephone on May 8, 1950, by respondent Cullum to place certain trades in a 

"J. K. Jones" account and that Cullum assured him that Miss Jones would 

telephone to confirm the trades and give her name and address (tr. pp. 1787-

1789). The testimony on behalf of the Sirotas in this connection was to the 

effect that Miss Jones did telephone and gave "Jessica K. Jones, c/o Buck Jones, 

Clark-Downes Equipment Company, Odessa, Texas," as the name and address of an 

account being opened (tr. pp. 1642-1643). There was evidence that no original 

deposit in this account was made although Miss Jones was asked to make such a 

deposit by a letter from the respondent partnership on May 8, 1950. On the 

other hand, there was evidence that Cullum furnished margin for the account on 

two occasions. One occasion was the $ 3,500 which the complaint alleged was 

placed in the Jessica K. Jones account without authority from Dyke Cullum. The 

testimony of the respondents other than Cullum was that the Dyke Cullum 

regulated account needed $ 7,000 margin and the Jessica K. Jones account $ 3,500 

margin, that Aspinwall brought a letter to Cullum in Washington, D. C., showing 

the status of both accounts and that Cullum gave Aspinwall a check for $ 10,500 

to cover margin for both accounts. The other occasion testified to was in 

connection with the liquidation of the joint venture in the twenty cars of spot 

cottonseed oil when Cullum was given a check from the Sirotas for his investment 

and profit and Cullum in turn gave the Sirotas a check for margin in his 

regulated account, the Kiki Cullum account and the Jessica K. Jones account. 

There was also evidence that Cullum gave the trading orders in the Jones account 

and received duplicates of the confirmations of trades. 

Misuse of Customer's Funds

Respondent Cullum testified that he did not authorize the Sirotas to credit $ 

3,500 of his money to the Jessica K. Jones account and that he protested this 

action to no avail (tr. pp. 15-16, 33-36, 38-40, 512-513, 566-577, 836-839). He 

stated that on May 20 Aspinwall came to his office in Washington and asked him 

for $ 10,-500 margin, pursuant to which he issued him a check for $ 10,500 

(Government Exhibit 6). Cullum claimed that the margin was meant only for his 

own account (tr. p. 513). 

As pointed out above, however, there was evidence on behalf of the Sirotas 

that $ 3,500 of Cullum's check for $ 10,500 was intended by Cullum to margin the 

Jessica K. Jones account, and there was also evidence that Cullum's subsequent 

check for $ 40,-000 was intended by him to margin all three accounts, the Dyke 

Cullum account, the Kiki Cullum account, and the Jessica K. Jones account. 

FINDINGS OF FACT

1. Respondent George Sirota and Sons is a partnership consisting of George 

Sirota, Norman L. Sirota, and Benjamin Sirota, doing business at 60 Beaver 

Street, New York, New York. The firm deals in edible oils and other commodities 
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for its own account and for the account of customers. The firm was, at all 

times hereinafter mentioned, and is now a registered futures commission merchant 

under the Commodity Exchange Act and a member of the New York Produce Exchange, 

a duly designated contract market under the Commodity Exchange Act. 

2. Respondents George Sirota, Norman L. Sirota, and Benjamin Sirota are 

members of the respondent partnership and each is a registered floor broker 

under the Commodity Exchange Act. 

3. Respondent Harry A. Aspinwall is a member of the Chicago Mercantile 

Exchange and the New York Mercantile Exchange. He is a registered floor broker 

under the act and he engaged in the activity of floor broker on the New York 

Mercantile Exchange. At the time of the transactions hereinafter described, he 

was also authorized by the respondent partnership to act as its agent in the 

solicitation of business, including futures transactions to be executed on the 

New York Produce Exchange. 

4. Respondent Dyke Cullum, Hibbs Building, Washington, D. C., is an 

individual who traded in commodity futures as a customer of the respondent 

partnership. 

5. Kiki Cullum, Houston, Texas, is the daughter of Dyke Cullum. Joycette K. 

(or Jessica K.) Jones is an individual who for some time previous to May 8, 

1950, was Clerk of the United States Senate Agriculture and Forestry Committee. 

6. In December 1949, respondent Dyke Cullum opened a futures trading account 

with the respondent partnership as the result of solicitation by respondent 

Aspinwall. During succeeding 

months, respondent Cullum did considerable trading in this account, mainly in 

soybean and cottonseed oil futures. On April 22, 1950, over the telephone from 

Washington, D. C., to Aspinwall in New York City, Cullum ordered the purchase of 

five October soybean oil contracts and told Aspinwall to place two of the 

contracts in a "Kiki Cullum" account. Shortly thereafter the respondent 

partnership received a customer's agreement executed by Miss Kiki Cullum and a 

letter from Miss Cullum confirming the purchase of the two contracts. Both of 

these documents were dated April 22, 1950. Miss Kiki Cullum also made an 

original margin deposit of $ 2,000 in the account. 

7. On May 8, 1950, as the result of a telephone call from Dyke Cullum to 

respondent Harry Aspinwall in New York City, an account was opened by the 

respondent partnership in the name of "J. K. Jones" and five purchases of 

September soybean oil futures were entered in the account. A few hours after 

the opening of the account, the name of the account was changed to "Jessica K. 

Jones" because of a telephone call to the respondent partnership by Miss 

Joycette K. Jones, who gave a name which was understood to be "Jessica K. Jones" 

and the address "c/o Buck Jones, Clark-Downes Equipment Company, Odessa, Texas," 

as the name and address of an account being opened. At a later time, the name 

"Jessica" was lined out on the Sirotas' contract ledger and replaced by 

"Joycette." The firm's financial ledger carried the account in the name "Jessica 

K. Jones" and throughout the life of the account the respondent firm in 

confirmations of trades and in correspondence described the account as the 

"Jessica K. Jones" account, or the "J. K. Jones" account. 

8. Upon the opening of the Jessica K. Jones account, the respondent 

partnership sent a letter to Jessica K. Jones at the Texas address asking for an 

original margin deposit in the account, but no reply was made and no such 

deposit was received by the respondent partnership. The usual customer's 

agreement was not executed by Miss Jones. Respondent Aspinwall knew that "J. K. 

Jones" or "Jessica K. Jones" was really "Joycette K. Jones" and that she was 

Clerk of the United States Senate Committee on Agriculture and Forestry. 

Between May 8, 1950, and August 9, 1950, seven contracts of September soybean 

oil, five contracts of July cottonseed oil and eleven contracts of December 

cottonseed oil were purchased and sold and the transactions entered in the 
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Jessica K. Jones account. Trading orders for these transactions were given by 

respondent Dyke Cullum and the respondent partnership 

sent confirmations to Miss Jones at the Texas address and duplicates to Dyke 

Cullum. 

9. Following the opening of the Kiki Cullum account with the purchase of two 

contracts of October soybean oil on April 22, 1950, the following contracts were 

purchased and sold and placed in the Kiki Cullum account as the result of 

trading orders from respondent Dyke Cullum and with duplicates of the 

confirmations sent to Dyke Cullum: 

8 July cottonseed oil 

6 September cottonsed oil 

19 December cottonseed oil 

1 July soybean oil 

1 August soybean oil 

3 September soybean oil 

6 October soybean oil 

10. After the opening of the Kiki Cullum and the Jessica K. Jones accounts, 

the respondent Dyke Cullum would usually telephone from Washington, D. C., to 

respondent Harry Aspinwall at Aspinwall's office in New York City and give 

Aspinwall trading orders. Aspinwall would either call respondent Ben Sirota on 

another telephone to relay the orders or would have respondent Ben Sirota 

connected with him and Cullum on a three-way telephone hook-up. Aspinwall would 

notify Cullum over the telephone of the execution of the orders and often Cullum 

would then tell Aspinwall which account, that is, the Dyke Cullum account, the 

Kiki Cullum account, or the Jessica K. Jones account, was to take the trades. 

Aspinwall would then give the instructions from Cullum to the Sirota firm. 

11. Respondent George Sirota and Sons and respondent Harry A. Aspinwall knew 

that the transactions entered in the Jessica K. Jones account between May 8 and 

August 9, 1950, as described above, were for the benefit and account of a person 

other than Jessica K. Jones or Joycette K. Jones. These respondents treated and 

dealt with the Jessica K. Jones account as though it were the account of 

respondent Dyke Cullum, but there was no indication on the books and records of 

George Sirota and Sons that any person other than Jessica K. Jones had any 

interest in the account. 

12. On June 23, 1950, respondent Dyke Cullum, for the purpose of switching 

forward a long position in July soybean oil, directed George Sirota and Sons to 

sell five contracts of July soybean oil and purchase five contracts of September 

soybean oil for his account. Respondent George Sirota and Sons then entered the 

 

purchase of five September contracts in the account of respondent Dyke Cullum 

but subsequently, at the instructions of respondent Cullum, deleted such entry 

and entered three contracts of the said purchase in the Kiki Cullum account and 

two contracts in the Jessica K. Jones account. Prior to this purchase, 

respondent Dyke Cullum had bought and was holding twelve contracts of September 

soybean oil on the New York Produce Exchange and the additional five contracts 

purchased on June 23 made his total long position seventeen contracts. 

13. Respondent George Sirota and Sons was aware of the fact that the purchase 

of five contracts of September soybean oil on June 23, described in Finding of 

Fact 12, represented the switching forward of a July position held by respondent 

Dyke Cullum, that respondent Cullum held a long position of twelve contracts in 

September soybean oil on the New York Produce Exchange prior to such purchase, 
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and that the additional five contracts executed for his account gave him a total 

long position of seventeen contracts. 

14. Section 4i of the act (7 U.S.C. § 6i) requires reports in accordance with 

rules and regulations of the Secretary of Agriculture whenever a person shall 

directly or indirectly have or obtain a long or short position in a future of a 

commodity equal to or in excess of such amount as shall be fixed by the 

Secretary of Agriculture. Sections 10.10, 10.11, and 10.21 of the rules and 

regulations under the act (17 CFR 10.10, 10.11, 10.21) require reports from any 

person who holds or controls open contracts equal to or in excess of 900,000 

pounds of oil (soybean or cottonseed) which is the equivalent of 15 contracts or 

carlots. Sections 10.4, 10.5, 10.6, and 10.20 of the regulations require each 

futures commission merchant to report positions in a customer's account whenever 

such positions equal or exceed 15 contracts of soybean oil futures (17 CFR 10.4, 

10.5, 10.6, 10.20). 

15. Pursuant to the requirements of the regulations mentioned in Finding of 

Fact 14 above, reports were due from the respondent Dyke Cullum on 14 days 

during the period from June 23, 1950, to August 10, 1950, and from the 

respondent partnership on every business day during this period. Respondent 

Dyke Cullum filed no such reports although he was aware of the reporting 

provisions and of the fact that he was obligated to make such reports regardless 

of the names of the accounts in which the contracts were carried. No reports of 

Cullum's holdings were made by the respondent partnership until after July 18, 

1950, when as a result 

 

of a controversy between Cullum and the other respondents, the Sirotas and 

Cullum went to the Commodity Exchange Authority. The respondent partnership 

knew the reporting requirements of the regulations and knew that the five 

September contracts purchased for Cullum put him in reporting status. 

16. On May 22, 1950, the account carried on the books of George Sirota and 

Sons in the name of Dyke Cullum needed approximately $ 7,000 for margin and the 

account carried in the name of Jessica K. Jones needed approximately $ 3,500 for 

margin. On that date, respondent Dyke Cullum delivered to respondent Harry A. 

Aspinwall a check for $ 10,500. This sum was intended by respondent Dyke Cullum 

to cover the margin needed in both accounts and was so credited by George Sirota 

and Sons. 

17. On July 18, 1950, after liquidation of the spot oil transaction involving 

20 tank cars of cottonseed oil, the respondent Cullum paid to respondent George 

Sirota and Sons the sum of $ 40,000 to cover margin requirements for the Dyke 

Cullum account, the Kiki Cullum account, and the Jessica K. Jones account, 

knowing at the time that the said sum was given for the purpose of margining all 

three accounts. 

18. The transactions described in the foregoing Findings of Fact could have 

been used for hedging transactions in interstate commerce in cottonseed oil or 

soybean oil or the products or byproducts thereof, or determining the price 

bases of contracts in interstate commerce in such commodities, or for delivering 

such commodities in interstate commerce. 

CONCLUSIONS

I

It is admitted that respondent Dyke Cullum held a long position of twelve 

contracts of September soybean oil prior to his purchase of five additional long 

contracts on June 23, 1950, which brought his long position to seventeen 

contracts, or two over the reporting limit. Respondent Cullum does not dispute 

the fact that he failed to file the required reports nor does he dispute the 

fact that he intentionally failed to file. His defense is only that he was 

persuaded to put the five contracts in the Kiki Cullum and Jessica K. Jones 

accounts by Aspinwall and the Sirotas and that since neither Kiki Cullum nor 

Jessica K. Jones authorized the placing of these contracts in their accounts, 
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the purchase of the five contracts was never consummated and respondent Cullum 

was, therefore, never in reporting status. This defense has no merit. The 

purchase was 

 

made on the New York Produce Exchange with George Sirota and Sons taking the 

other side of the transaction and was entered on the firm's books and records. 

Whether Kiki Cullum or Jessica K. Jones approved the placing of the contracts in 

their accounts is wholly immaterial insofar as this violation is concerned. 

Respondent Cullum admits that the trades were made and that they belonged to 

him. Cullum himself described the arrangements as "shady" (tr. pp. 705, 706). 

Therefore, we must conclude that respondent Dyke Cullum wilfully violated the 

act and the regulations as charged in the complaint when he failed to report the 

purchase and the resulting market position. 

II

Proceeding to the charge against the respondent partnership of wilfully 

failing to file reports, George Sirota and Sons became obligated to report Dyke 

Cullum's long September soybean oil position of seventeen contracts as of June 

23, 1950, if it knew that the five contracts purchased on that day belonged to 

Dyke Cullum. The evidence is clear that the firm knew this. The purchase of 

five Septembers for Cullum was to replace five Julys of Cullum and was 

accomplished after considerable discussion between Cullum and the Sirotas as to 

what the premium would be for July over September. The purchases were first 

entered in Dyke Cullum's account and later "lined out" after the firm received 

instructions from Cullum to place three of the contracts in the Kiki Cullum 

account and two in the Jessica K. Jones account. 

Whether or not Dyke Cullum "owned" the Kiki Cullum n2 or Jessica K. Jones 

accounts, he gave the trading orders in these two accounts and "controlled" 

them. Respondent Benjamin Sirota testified that the Sirotas treated Cullum as 

if he had a power of attorney in the Kiki Cullum and Jessica K. Jones accounts. 

Section 10.04(b) of the regulations provides: 

"(b) Accounts belonging to or controlled by the same person. For the purpose 

of reporting on Form 1001, all accounts which belong to or are controlled by the 

same person shall be considered one account. All accounts required to be 

reported on Form 1001 shall be known as 'special accounts' and the report 

thereon shall show the net position, as of the close of the market on the day 

covered by the report, of each such 

 

account in each future in which there are open contracts equal to or in excess 

of such specified amount." 

n2 The complaint does not charge the Sirotas or Aspinwall with any 

violations of the act or regulations with respect to the Kiki Cullum 

account except in connection with the three September soybean oil contracts 

of Dyke Cullum placed in the Kiki Cullum account. 

Section 1.3(j) of the regulations provides: 

"(j) Controlled account. An account shall be deemed to be controlled by a 

person if such person by power of attorney or otherwise actually directs trading 

for such account." 

It is plain, then, that under the regulations there is no validity in the 

defense of the Sirotas to the effect that they had to follow Cullum's 

instructions, that they had a right to assume that Cullum "gave" the five 

contracts to Kiki Cullum and Jessica K. Jones, etc. In fact, the Sirotas admit 

that they should have combined these five contracts with Cullum's twelve 

September long soybean oil contracts for reporting purposes, but they say that 

they did not deliberately participate in a plan to avoid reporting status for 
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Cullum. Their belated acknowledgement of their duty in this respect came after 

a break with Cullum. The evidence is that the Sirotas knew that Cullum had 

twelve September long contracts in the account in his name, they knew he 

switched five July for five September long contracts, they knew he gave the 

trading orders in the Kiki Cullum and Jessica K. Jones accounts and was running 

these accounts as well as the one in his own name, and they readily complied 

with his instructions to place the five September contracts, switched from 

Julys, in the Kiki Cullum and Jessica K. Jones accounts. Too, they had been 

warned by the Commodity Exchange Authority in a letter dated June 6, 1950 

(Government Exhibit 17), that their reports, including the types of reports 

involved here, were inaccurate and unsatisfactory. Unquestionably, the Sirotas 

aided Cullum in giving the appearance of not being in reporting status. All 

these facts add up to make the weight of the evidence as being to the effect 

that the firm wilfully failed to make the reports required by the regulations. 

III

We come next to the charges of violating section 4 of the act and section 

1.37 of the regulations against respondents Aspinwall and George Sirota and Sons 

by virtue of the transactions entered in the Jessica K. Jones account (excluding 

the two September soybean oil purchase contracts of June 23). The complaint 

alleges that these respondents confirmed the execution of contracts in commodity 

futures and wilfully failed to evidence such contracts by a record in writing 

showing the true names of the parties to such contracts in violation of section 

4 of the act and section 1.37 of the regulations. 

Section 4 of the act makes it unlawful for ". . . any person to 

 

deliver for transmission . . . any offer to make or execute, or any confirmation 

of the execution of, or any quotation or report of the price of, any contract of 

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

board of trade-in the United States . . . except . . . if such contract is 

evidenced by a record in writing which shows the date, the parties to such 

contract and their addresses . . ." (Emphasis supplied.) 

Section 1.37 of the regulations provides (17 CFR 1.37): 

"Customer's name, address, and occupation recorded; record of guarantor or 

controller of account. Each futures commission merchant and each member of a 

contract market shall keep a record in permanent form which shall show for each 

commodity futures account carried by him the true name and address of the person 

for whom such account is carried and the principal occupation or business of 

such person as well as the name of any other person guaranteeing such account or 

exercising any trading control with respect to such account. Such record shall 

be open to inspection by any authorized representative of the Commodity Exchange 

Authority." 

These respondents urge that section 4 of the act applies only to contracts 

between the members of the New York Produce Exchange because the contract 

"slips" made up from the floor brokers' cards at the end of the day are the only 

documents which show the "parties" to the futures contracts since the opposite 

party to each trade is lost when the contract has been cleared and the clearing 

house substituted. The same contention was made and overruled in Irving Weis 

and Co. v. Brannan et al., 171 F. (2d) 232 (C.C.A. 2d, 1948). 

As far as the Sirota respondents are concerned, there can be no doubt that 

they did not comply with section 1.37 of the regulations. While it is not too 

clear as to whether these respondents take the position in this proceeding that 

Cullum "owned" the Jessica K. Jones account, they have maintained that Cullum 

had authority to trade in the account and was financially responsible for it. 

Indeed, they insist in their brief (p. 22) filed after the close of the hearing 

that the hearing record evidence establishes that Cullum ". . . caused the 

Jessica K. Jones account to be opened, that he gave the orders for trades in 

that account and purported to exercise full authority over the account; that he 
Page 11 

knew the results of all the trading in the account; and that the account either 

belonged to him or was under his control at all times." 

Consequently, then, under either situation, that is whether the Sirotas 

believed that Cullum owned the Jessica K. Jones account 

 

or believed that he merely controlled it, the Sirota respondents should have 

shown in their records the connection of Cullum with the Jessica K. Jones 

account. This they did not do. 

Aspinwall disclaims violation of section 1.37 of the regulations on the 

ground that the regulation applies only to the futures commission merchant or 

member of the contract market who carries the accounts. He says that he was 

merely the solicitor or agent for the Sirota firm which carried the account and 

that, consequently, he cannot be charged with violation of this section of the 

regulations. Aspinwall participated in the setting up of the Jessica K. Jones 

account and serviced this and the Dyke Cullum and Kiki Cullum accounts. We 

conclude that this section of the regulations reaches him also. 

But even if we may not be correct in our view of the applicability of section 

1.37 of the regulations to Aspinwall, section 4 of the act itself was breached 

by both Aspinwall and the Sirota respondents. Aspinwall accepted orders from 

Cullum by telephone to execute trades, he confirmed the execution of trades by 

telephone and relayed directions to the Sirotas from Cullum as to the accounts 

in which the trades should be placed. Such activities under the circumstances 

constitute violations of section 4 of the act when Aspinwall knew that Jessica 

K. Jones or Joycette K. Jones was not the owner of the Jessica K. Jones account. 

Of course, the Sirota respondents also violated section 4 of the act as well as 

section 1.37 of the regulations by reason of the execution, confirmation, etc., 

of contracts, and the carrying of an account in the name of Jessica K. Jones 

when it was plain, and they knew, that she was not the party to the contracts 

and was not the owner of the account. 

These respondents would have us conclude, however, that they believed that 

Miss Jones was the owner of the account in her name and that Cullum merely had 

some kind of oral permission or authority from Miss Jones to trade the account 

plus financial responsibility. This defense is no answer to the charge of 

violating section 1.37 of the regulations which required these respondents to 

make a record of the fact that Cullum controlled this account. 

In any event, though, the respondents ask us to consider them so naive as to 

believe that a person owned an account for which the person supplied no 

customer's agreement, no funds, no trading orders, no power of attorney for 

anyone else to trade the account, and for which the person gave an address at 

which they knew she was not living at the time the account was opened. They 

admit that Cullum opened the account, gave the trading orders and 

 

furnished the funds. They stated in a letter to the Commodity Exchange 

Authority on July 20, 1950 (Sirota Exhibit 1), that Dyke Cullum ". . . has 

opened another account in a different name." This was the Jessica K. Jones 

account which had been opened as far back as May 8, 1950. In the face of these 

facts, we cannot accept as true the respondents' pleas that they believed Miss 

Jones to be the owner of the account. 

It is true, of course, as invoked by these respondents, that Miss Jones made 

a telephone call to the Sirota firm giving the name and the address for the 

account and that Miss Jones did not repudiate at least the first confirmations 

of trades sent to the Texas address. These respondents place much stress upon 

these aspects of the case and they also claim that they tried to get a power of 

attorney n3 executed by Miss Jones in favor of Cullum. These items of 

attempting protective coloration were merely half-gestures to give some 

semblance of regularity to the account and were recognized by Aspinwall and the 
Page 12 

Sirotas as such. Aspinwall himself testified as to his misgivings when he got 

instructions from Cullum over the telephone to place trades in "J. K. Jones" 

account. n4 

n3 The Jessica K. Jones account was opened on May 8, 1950, but no 

deposit in the account was made until Cullum made a deposit of $ 8,500 on 

May 22, 1950, and Cullum Exhibit 1 shows Aspinwall and the Sirota firm 

asking Cullum on June 26, 1950, to have "Buck" (apparently Miss Jones' 

brother) execute a power of attorney in Cullum's favor. 

n4 "Q Now, we will move along to the date of the opening of the Jones 

account, which was May 8, 1950. Do you recall the circumstances relating 

to the opening of the Jones account? 

"A Yes. 

"Q Will you tell us for the record what happened in that connection? 

"A On that day, Dyke called me and said he wanted to do some trading, 

and we talked generally about the market conditions, so I called down to 

the floor and asked them what the market was and got the last trade from 

Bernie. I proceeded then to tell Dyke what the last trades were. He asked 

me to get the bid and asked, and I got that for him, which I immediately 

transmitted to him on the telephone, and then he said, 'Pick up a certain 

quantity of oil,' which I immediately transmitted to Bernie, waiting for a 

report, I mean, as to whether or not it was executed. It was executed, I 

transmitted the information to Dyke, and we talked a second. He said, 'Put 

that in the Jones account.' And I said, 'Jones?' I said, 'What Jones?' He 

said, 'J. K. Jones.' I said 'Dyke,' I said, 'Jones?' He said, 'J. K. Jones, 

Yes.' He said, 'Everything will be taken care of.' He said, 'You know how 

Kiki Cullum's account was handled.' and he said, 'Don't worry about it.' I 

said, 'Okay, Dyke, you know damn good and well what this whole CEA thing is 

about, so you ought to know what you are doing.' 

"Q And then what happened? 

"A I hung up -- he hung up." (Tr. pp. 1787-1788) 

IV

The action of the Sirota respondents in placing three of the five September 

soybean oil contracts of Cullum in the Kiki Cullum account and two of these 

contracts in the Jessica K. Jones account 

 

also amounted to violations of section 4 of the act and section 1.37 of the 

regulations. These respondents knew that the contracts were Cullum's and, 

therefore, they wilfully violated these sections of the act and the regulations. 

V

The Sirota respondents and Aspinwall seek escape from liability for the 

violations found by claiming that they did not participate in any plan to 

conceal Cullum's trading and that they should not be found to have violated 

wilfully either section 4i of the act and the reporting regulations or section 4 

of the act and section 1.37 of the regulations. The facts demonstrate that the 

Sirota firm did not make the required reports, that Jessica K. Jones was not the 

true owner of the account in this name and that the Sirota records had no 

indication that any other person was trading the account, and that the Sirota 

firm placed in this and in another account contracts which they knew belonged to 

Dyke Cullum. They obscured the truth as to the facts of Cullum's trading and as 

to the operation of the Jessica K. Jones account. Aspinwall was the Sirota 

firm's agent and the Sirotas are responsible under section 2 of the act for the 

activities of Aspinwall. 
Page 13 

Throughout the proceeding, the Sirotas and Aspinwall seem to press the theory 

that they should be exonerated if they are successful in proving that they only 

did what Cullum told them to do. This avenue of escape would not be open for 

them in any event but the evidence is unmistakable that they took the risk, with 

knowledge, of playing along with a trader whom they regarded as influential in 

Washington, D. C., circles. If the fates had been kind, the facts might never 

have been known and this proceeding might not have been born. For several 

reasons, however, the arrangements soured and the protestations now of gullible 

innocence lack conviction. 

Violations of the act and the regulations need not possess as an 

indispensible ingredient, which the respondents apparently argue, some sort of 

malevolence, evil intent, or motive to hide someone else's violation of the act. 

Wilfulness means "no more than that the person charged with the duty knows what 

he is doing" and it "does not mean that, in addition, he must suppose that he is 

breaking the law." Townsend v. United States, 95 F.(2d) 352, 358 (App. D. C. 

1938), cert. denied, 303 U.S. 664 (1938). 

VI

The Sirota respondents and Aspinwall argue that their motions to dismiss 

following the presentation of the complainant's case at the hearing should have 

been granted. Their position is that the only evidence presented by the 

complainant up to that time in the proceeding that could support the charges was 

heresay evidence, namely the testimony of Bagnell as to his conversations with 

respondent Dyke Cullum and Miss Joycette K. Jones. Upon objection by counsel 

for the Sirotas, the referee had ruled that Bagnell's testimony as to Cullum's 

statements was admitted in evidence but would be stricken if Cullum did not 

testify during the course of the hearing and thus be available for crossexamination by the other respondents. The insistence by these respondents upon 

dismissal following testimony by the complainant's witnesses is based upon the 

proposition that since an administrative finding of fact cannot be supported by 

hearsay evidence exclusively (citing such cases as Consolidated Edison Co. v. National Labor Relations Board, 306 U.S. 197, 217 (1939); and Willapoint Oysters

v. Ewing, 174 F.(2d) 676 (C.C.A. 9th, 1949), cert. denied, 338 U.S. 860 (1950), 

these respondents had a right to dismissal of the complaint because the 

complainant introduced only hearsay evidence to support the charges. As 

additives to their grievances on this score, they complain because the 

complainant did not call respondent Dyke Cullum, Kiki Cullum or Miss Jones as 

complainant's witnesses, and they point out that a result of failure to grant 

the motion to dismiss is that the complainant may utilize against them on the 

merits the testimony of another respondent, Dyke Cullum, who is hostile to them. 

The proposition that in an administrative proceeding the complaining agency 

must establish its case before it rests by means of the same quantity and 

quality of evidence necessary to support findings of fact following the full 

hearing is somewhat novel and intriguing. The respondents concede that they 

have been unable to discover any authorities in support of their view. But we 

do not believe it necessary to examine this point more carefully because there 

was ample evidence to warrant continuance of the hearing without reference to 

the testimony of Bagnell concerning his conversations with Cullum and Miss 

Jones. Bagnell's testimony about his conferences with the Sirotas and Aspinwall 

were not heresay as to these respondents. According to Bagnell, the Sirotas 

admitted that they should have combined, for reporting purposes, the five 

September soybean oil contracts placed in the Kiki Cullum and Jessica K. Jones 

accounts with the twelve September contracts 

 

in Dyke Cullum's account. The Sirotas also stated, according to Bagnell, that 

they considered the Kiki Cullum and Jessica K. Jones accounts as belonging to 

Dyke Cullum and that each of these accounts was opened upon instructions from 

Cullum and that he gave all the trading orders in these accounts. This 
Page 14 

testimony and the supporting exhibits, together with Robinson's testimony 

concerning failure to report, were more than enough to proceed with the hearing. 

Insofar as the charge of misusing customer's funds is concerned, that charge was 

dropped following the hearing. There was adequate reason, too, to continue the 

hearing with respect to respondent Dyke Cullum. 

On the merits, also, the weight of the evidence establishes the violations 

found against Aspinwall and the Sirotas without reference to Cullum's testimony 

or Bagnell's testimony as to his conversations with Cullum and Miss Jones. It 

was appropriate for the complainant to abandon the charge of misusing customer's 

funds in view of the evidence that Cullum intended to margin the Jessica K. 

Jones account. 

The respondents raised a number of objections, procedural and otherwise, 

during the course of the proceeding. Some of the respondent Cullum's objections 

were taken as if he were the complainant in this proceeding rather than a 

respondent. We do not consider it necessary to discuss and evaluate all the 

objections and exceptions not specifically mentioned herein. Of course, all 

requests for findings and all exceptions, objections, etc., that are 

inconsistent with this decision and order are overruled. 

Accordingly, then, sanctions should be ordered. The respondent partnership 

is responsible under section 2 of the act for the violations found, Irving Weis 

and Co. v. Brannan, et al supra, whether or not George Sirota personally 

participated in or was aware of what was happening. Therefore, the registration 

of the partnership as a futures commission merchant should be suspended and we 

think a suspension of 10 days is sufficient. The registrations of Aspinwall, 

Benjamin Sirota and Norman L. Sirota as floor brokers should also be suspended 

for 10 days because these respondents were involved in the violations. With 

respect to George Sirota, we do not appraise the evidence as proving his 

personal participation in, or awareness of, the violations except that he 

learned of Cullum's connections with the Kiki Cullum account and the Jessica K. 

Jones account when the controversy arose over whether the Sirotas should hold 

Cullum financially responsible for these accounts. It is clear from the 

evidence too, that Norman L. and Ben Sirota rather than George Sirota conducted 

the part 

 

of the firm's business dealing with the futures accounts of customers. We 

refrain, then, from ordering suspension of the registration of George Sirota as 

floor broker. 

The unregistered respondent, Dyke Cullum, should be denied trading privileges 

on the contract markets for ten days. We do not deem it necessary, however, to 

impose this sanction also upon the registered respondents in addition to 

suspensions of their registrations. 

ORDER

The registration under the act of George Sirota and Sons as a futures 

commission merchant is suspended for ten days and the registrations under the 

act of Norman L. Sirota, Benjamin Sirota and Harry A. Aspinwall as floor brokers 

are suspended for ten days. 

All contract markets shall refuse all trading privileges to Dyke Cullum for a 

period of ten days. 

This order shall become effective on September 1, 1953. A copy hereof shall 

be served by registered mail upon each respondent and each contract market under 

the act. 

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