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Commodity Futures Trading Commission 

CEA CASES 

NAME: THE SIEGEL TRADING CO., INC., JOSEPH E. SIEGEL, ALVIN C. WINOGRAD, AND D. 

PETER ANDERSON 

CITATION: 29 Agric. Dec. 189 

DOCKET NUMBER: 159 

DATE: MARCH 2, 1970 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 13,025) 

In re THE SIEGEL TRADING CO., INC., JOSEPH E. SIEGEL, ALVIN C. WINOGRAD, AND D. 

PETER ANDERSON. CEA Docket No. 159. Decided March 2, 1970. 

Deceiving customers -- False reports and records -- Cease and desist -- 

Stipulation

Respondents are ordered to cease and desist from closing out, on any basis 

other than a "day trade" basis any purchase and sale without consent of the 

customer for whom such purchase and sale are made, making any record or report 

purporting to show that a trade has been made for a customer when no such trade 

has been made, failing to place in a customer's account any trade that is 

executed pursuant to such customer's order, and failing to compute accurately 

and maintain required records. 

Earl L. Saunders for Commodity Exchange Authority. 

Moss, Rose & Kroll, New York, N.Y., and Harold D. Cooley, Washington, D.C., 

for respondents. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

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

U.S.C. Chapter 1, 1964 ed., as amended, Supp. IV, 1969), instituted by a 

complaint and notice of hearing issued on May 7, 1969, under sections 6(b) and 

6(c) of the said Act (7 U.S.C. Supp. IV, 9 and 13b). All of the respondents are 

charged with violating section 4b of the Commodity Exchange Act (7 U.S.C. Supp. 

IV, 6b), and respondents The Siegel Trading Co., Inc., Joseph E. Siegel and 

Alvin C. Winograd are charged with 

violating sections 4c, 4d and 4g of the said Act (7 U.S.C. 6c; 7 U.S.C. Supp. 

IV, 6d and 6g), and sections 1.23, 1.32 and 1.35 of the regulations (17 CFR 

1.23, 1.32 and 1.35). 

No hearing has been held in this proceeding. On February 3, 1970, the 

respondents filed a stipulation under section 0.4(b) of the rules of practice 

(17 CFR 0.4(b)), in which they (1) withdraw the answers previously filed in 

their behalf, (2) admit the facts hereinafter set forth in paragraphs 1 through 

4 of the Findings of Fact, (3) admit, for the purposes of this proceeding and 

for such purposes only, the remaining facts set forth in the Findings of Fact, 

and (4) waive the report of the Hearing Examiner and consent to the entry of the 

order contained herein. In such stipulation respondents The Siegel Trading Co., 

Inc., Joseph E. Siegel and Alvin C. Winograd represent that the corporate 

respondent set up subsequent to issuance of the complaint and will continue to 

maintain an internal management and audit system which will result in (1) due 
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diligence being used in the selection, training and supervision of the firm's 

officers and employees involved in the handling of accounts of customers trading 

in commodity futures, and (2) all officers and employees of the firm operating 

in compliance with the Commodity Exchange Act and the regulations thereunder, 

the rules of the exchanges on which the firm trades in commodity futures and the 

firm's operating procedures. Also in such stipulation respondent The Siegel 

Trading Co., Inc., represents "that subsequent to issuance of the complaint it 

has reimbursed the individual customers named in paragraph V of the complaint 

for the amounts of commission overcharges and is in the process of reimbursing 

the customer named in paragraph VII of the complaint for the loss occasioned by 

its failure to confirm the execution referred to therein." 

FINDINGS OF FACT

1. Respondent The Siegel Trading Co., Inc., whose business address is 100 

North La Salle Street, Chicago, Illinois, is now, and was at all times material 

herein, a corporation organized and existing under the laws of the State of 

Illinois, with its principal office and place of business in Chicago and branch 

offices at New York City and various other cities. The said corporation is now, 

and was at all such times, a clearing member of the Chicago Mercantile Exchange 

and the New York Mercantile Exchange, and a registered futures commission 

merchant under the Commodity 

Exchange Act, engaged in the business of trading in commodities for future 

delivery for the accounts of customers. 

2. Respondents Joseph E. Siegel and Alvin C. Winograd, individuals, whose 

business address is 100 North La Salle Street, Chicago, Illinois, are now, and 

were at all times material herein, President and Secretary-Treasurer, 

respectively, of the respondent corporation and registered floor brokers under 

the Commodity Exchange Act. At all such times, the said respondents managed the 

business of the respondent corporation and, at all such times, the acts and 

transactions by the respondent corporation were initiated and carried out under 

the said respondents' supervision as officers of the respondent corporation. 

3. Respondent D. Peter Anderson, an individual, was at all times material 

herein, employed by the respondent corporation as an account executive in its 

New York office. He is no longer so employed. 

4. The Chicago Mercantile Exchange, the New York Mercantile Exchange and the 

New York Cotton Exchange are now, and were at all times material herein, duly 

designated contract markets under the Commodity Exchange Act. 

5. On April 22 and 23, 1968, the respondent corporation, acting pursuant to 

orders given by respondent D. Peter Anderson on behalf of customers for whom he 

traded on a discretionary basis, executed purchases and sales of May 1968 Maine 

potato futures on the New York Mercantile Exchange, which in the regular course 

of business would have been closed out on a "day trade" basis. Instead of 

closing out such purchases and sales on a "day trade" basis, the said 

respondents offset the sales against purchases made on earlier days and 

thereafter, offset the purchases against sales made on subsequent days. Closing 

out the purchases and sales made on April 22, 1968, and those made on April 23, 

1968, in the manner described above, caused the customers to pay to the 

respondent corporation in connection with such trades, twice the amount of 

commissions that the customers would have paid if such trades had been closed 

out on a "day trade" basis, and operated to conceal from the customers for a 

period of time the true status of their accounts. With respect to such trades, 

the following tabulation shows (1) the names of the customers, (2) the quantity 

(one side only) executed each day for each customer, (3) the close-out 

commissions paid by each customer, (4) the financial results reported by the 

respondent corporation to each 
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customer with respect to the transactions in which the sales made for the 

customer's account were offset against his previously held position, and (5) the 

commission that would have been payable by each customer and the financial 

results that would have been reported to each customer, if the purchases and 

sales had been closed out on a "day trade" basis. 

See original document-page 4 

Date Number of Commissions Commissions Payable and 

April Contracts Paid and Financial Financial Results If Trades

Results Reported Closed Out On Day Trade 

Basis 

Customer 1968 (One Side Commission Profit Commission Profit Loss 

 Only) George Faludi 23 15 $ 375.00 $ 4,560.00 $ 187.50 $ 560.00 $ 

J. Edward 22 9 225.00 1,240.00 112.50 135.00

 Kelley, Jr. 23 11 275.00 1,895.00 137.50 545.00 

John L. 23 3 75.00 865.00 37.50 75.00 Renjilian Jerome 22 11 275.00 1,230.00 137.50 165.00

 Schneir 23 14 350.00 2,415.00 175.00 460.00 Thomas 22 8 200.00 920.00 100.00 120.00

 Tracey 

23 10 250.00 1,715.00 125.00 320.00 Herbert 22 6 150.00 510.00 75.00 75.00

 Weinstock 23 10 250.00 1,735.00 125.00 545.00 

6. The respondent corporation made entries in its books as of March 7, 1968, 

purporting to show that on that day it had purchased and sold March 1968 No. 2 

cotton futures on the New York Cotton Exchange for the accounts of its 

customers, as follows: 

Number of Price Per Pound 

Contracts Purchased Sold (Cents) Customer 

1 31.42 Don C. Como 

2 31.42 Robert E. Dorroh 

6 31.42 Alan R. Schrift 

1 31.42 J. J. Neal 

1 31.51 J. L. Lewis, Jr. 

The respondent corporation confirmed to each such customer each such trade 

purportedly made for his account. On the same date, March 7, 1968, the 

respondent corporation made additional entries in its books purporting to show 

that on that day it had sold one contract of March 1968 No. 2 cotton futures at 

a price of 31.42 cents per pound for its house account. In truth and in fact, 

as the respondent corporation knew, none of such sales and only four of such 

purchases were actually executed. 

7. On October 3, 1967, the respondent corporation received an order from 

Joseph E. Monahan, a customer, to purchase 100 bales of March 1969 No. 2 cotton 

futures on the New York Cotton Exchange at a price of 31.92 cents per pound or 

better for his account. On the same day, the respondent corporation executed 

the said order at a price of 31.86 cents per pound and thereupon orally reported 

its execution to Joseph E. Monahan. The respondent corporation subsequently 

refused to confirm such execution in writing and on or about November 1, 1967, 

reported to Joseph E. Monahan that the said order had not been executed. 

8. The futures transactions described in paragraphs 5 through were capable of 

being used for hedging transactions in interstate commerce in such commodities 

or the products or byproducts thereof, or for determining the price basis of 
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transactions in interstate commerce in such commodities, or for delivering such 

commodities sold, shipped, or received in interstate commerce. 

9. (a) As of April 19, 1968, the respondent corporation had failed to make 

any computation or permanent record, as of the close of business on April 15, 16 

and 17, 1968, of the amount of money, securities, and property required to be 

held in segregated 

account in order to pay the credits and equities due to its customers, as 

provided in section 1.32 of the regulations (17 CFR 1.32) and as of August 12, 

1968, had failed to make any such computation or record as of the close of 

business on August 1, 2, 5, 6, 7, 8 and 9, 1968. 

(b) The segregation record prepared by the respondent corporation for March 

29, 1968, was incomplete and inaccurate to an extent which made it impossible to 

determine whether the funds held by the respondent corporation for customers 

were, in fact, sufficient to pay all credits and equities due to customers. 

(c) In preparing the daily computation and record of the amount of money, 

securities and property required to be held in segregation in order to pay the 

credits and equities due its customers during the period from November 29, 1967 

through March 29, 1968, the respondent corporation failed to take into 

consideration the payments made to, and the payments received from, its carrying 

brokers for its customers' accounts. Such payments were in varying amounts 

ranging from $ 10,000 to $ 350,000. 

(d) Between April 9 and July 16, 1968, with the exception of the period from 

May 1 through June 12, 1968, the respondent corporation failed to keep a daily 

record showing, for each transaction executed by it on the Chicago Mercantile 

Exchange, the identity of the customer for whose account the transaction was 

executed and the identity of the floor broker on the opposite side of the 

transaction, as required by section 1.35 of the regulations (17 CFR 1.35). 

(e) Between on or about August 1, 1967 and March 29, 1968, the respondent 

corporation failed to prepare contract ledger accounts showing its customers' 

trades carried with other futures commission merchants. 

10. On January 10, 1964, pursuant to section 0.4(a) of the rules of practice 

governing administrative proceedings under the Commodity Exchange Act (17 CFR 

0.4(a)), respondents The Siegel Trading Co., Inc., Joseph E. Siegel and Alvin C. 

Winograd entered into a stipulation in which they admitted: 

As of December 10, 1963, The Siegel Trading Co., Inc., has failed to compute 

and keep a record as of the close of the market on each of 23 business days from 

November 5 through December 9, 1963, showing the amount of money, 

security, and property owing or accruing to its customers which it was required 

to have in segregated account for such customers in order to comply with the 

requirements of section 4d(2) of the Commodity Exchange Act. Previous failures 

to compute and keep such records were discussed with Joseph E. Siegel and Alvin 

C. Winograd by CEA accountants at various times, and continuing failures were 

called to the attention of Joseph E. Siegel and The Siegel Trading Co., Inc., by 

the Act Administrator in a letter dated October 18, 1963. 

The said respondents, in such stipulation, admitted that "the acts and 

practices on the part of The Siegel Trading Co., Inc.," described above, "were 

directed and carried out under the supervision and control of respondents Joseph 

E. Siegel and Alvin C. Winograd in their capacities as president and secretary, 

respectively, of The Siegel Trading Co., Inc.," and agreed that they would 

"desist from such acts and practices in the future." 

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

that, as charged in the complaint: (1) all of the respondents violated section 

4b of the Commodity Exchange Act, and respondents The Siegel Trading Co., Inc., 

Joseph E. Siegel and Alvin C. Winograd violated sections 4c, 4d and 4g of the 

said Act, and sections 1.23, 1.32 and 1.35 of the regulations thereunder. The 

complainant states that the administrative officials of the Commodity Exchange 

Authority have carefully considered the stipulation and the terms of the 

proposed order and they believe that the prompt entry of such an order without 

further proceedings would constitute a satisfactory disposition of this case, 

serve the public interest and effectuate the purposes of the Commodity Exchange 

Act. The complainant, therefore, recommends that the stipulation be accepted 

and the proposed order be issued, terminating this proceeding. It is concluded 

that the complainant's recommendation should be adopted. 

ORDER

Effective immediately, respondents The Siegel Trading Co., Inc., and D. Peter 

Anderson shall cease and desist from closing out, or causing to be closed out, 

on any basis other than a "day trade" basis any purchase and sale of commodity 

futures that 

may be closed out on a "day trade" basis, unless this is done with the prior 

knowledge and consent of the customer for whom such purchase and sale are made. 

Effective immediately, respondent The Siegel Trading Co., Inc., shall cease 

and desist from: (1) making, or causing to be made, any record purporting to 

show that any trade in commodity futures has been made for the account of any 

customer when no such trade has been made; (2) making, or causing to be made, to 

any customer any report or statement purporting to show that any trade in 

commodity futures has been made for the account of such customer when no such 

trade has been made; (3) failing to place in any customer's account any trade in 

commodity futures that is executed pursuant to such customer's order; and (4) 

failing to accurately compute and maintain: (a) records as of the close of the 

market on each business day, showing the amount of money, security and property 

owing or accruing to its customers which it is required to have in segregated 

account for such customers in order to comply with the requirements of section 

4d(2) of the Commodity Exchange Act; (b) records showing customers' trades and 

positions carried with other futures commission merchants; (c) daily records 

showing for each transaction executed by it on the Chicago Mercantile Exchange 

the identity of the customer for whose account the transaction was executed and 

the identity of the floor broker on the opposite side of the transaction, as 

required by section 1.35 of the regulations; and (d) such other books and 

records relating to its business of dealing in commodity futures in such form 

and manner and for such period as may be required by the Secretary of 

Agriculture. 

Effective immediately, respondents Joseph E. Siegel and Alvin C. Winograd 

shall cease and desist from willfully causing, aiding, counseling, commanding or 

inducing respondent The Siegel Trading Co., Inc., to engage in any act or 

practice from which the said firm is directed to cease and desist by this order. 

The registration of respondent The Siegel Trading Co., Inc., as a futures 

commission merchant under the Commodity Exchange Act is suspended for a period 

of thirty (30) days. The said firm is prohibited from trading on or subject to 

the rules of any contract market for the same period of thirty (30) days, and 

all contract markets shall refuse all trading privileges to it during this 

period, such prohibition and refusal to apply to all trading done and positions 

held by The Siegel Trading Co., Inc., directly 

or indirectly. The registrations of respondents Joseph E. Siegel and Alvin C. 

Winograd as floor brokers under the Commodity Exchange Act are suspended for a 

period of fifteen (15) days. The said individuals and respondent D. Peter 
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Anderson are prohibited from trading on or subject to the rules of any contract 

market for the same period of fifteen (15) days, and all contract markets shall 

refuse all trading privileges to them during this period, such prohibition and 

refusal to apply to all trading done and positions held by them, or any of them, 

directly or indirectly. However, such suspension of registration and refusal of 

trading privileges shall not become effective unless, within three years from 

the date of issuance of this order, the respondents, or any of them, should, 

after complaint and hearing in accordance with established procedure, be found 

to have violated the Commodity Exchange Act or regulations by reason of acts 

other than those constituting the basis for the charges brought in this 

proceeding, in which event a supplemental order in this proceeding may be issued 

against the offending respondent or respondents, without further notice, making 

effective forthwith the aforesaid sanctions of suspension of registration and 

denial 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. 

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