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Commodity Futures Trading Commission 

CEA CASES 

NAME: UNITED COMMODITY TRADERS OF IOWA, INC., D/B/A JADA CORPORATION, AND JAMES 

B. PEPPER 

CITATION: 28 Agric. Dec. 6 

DOCKET NUMBER: 157 

DATE: JANUARY 30, 1969 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 12,229) 

In re UNITED COMMODITY TRADERS OF IOWA, INC., also d/b/a JADA CORPORATION, and 

JAMES B. PEPPER. CEA Docket No. 157. Decided January 30, 1969. 

Segregation of funds -- Records requirements -- Cease and desist -- 

Stipulation

Respondents are ordered to cease and desist from failing to keep in 

segregated account the amount of money, securities and property required to be 

held in segregation and failing to prepare and maintain an accurate record as of 

the close of the market on each business day of the amounts held in such 

account. 

John J. Casey for Commodity Exchange Authority. 

William J. Rawlings, of Kindig, Beebe, McCluhan & Rawlings, Sioux City, Iowa, 

for respondents. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

In this administrative proceeding under the Commodity Exchange Act (7 U.S.C. 

1 et seq.), the respondents are charged with violating §§ 4d(2) and 4g of the 

Act (7 U.S.C. 6d(2) and 6g) and §§ 1.20, 1.21, 1.22, 1.23, 1.32 and 1.35 of the 

regulations thereunder (17 CFR 1.20, 1.21, 1.22, 1.23, 1.32 and 1.35). 

No hearing has been held. The respondents have submitted a stipulation under 

§ 0.4(b) of the rules of practice (17 CFR 0.4(b)), in which they admit the facts 

hereinafter set forth, waive hearing on the charges, and consent to the entry of 

the order contained herein. 

FINDINGS OF FACT

1. Respondent United Commodity Traders of Iowa, Inc., also d/b/a Jada 

Corporation, is an Iowa corporation with offices at 201 Badgerow Building, Sioux 

City, Iowa, and is now, and was at all times material herein, registered as a 

futures commission merchant under the Commodity Exchange Act. On September 3, 

1968, the stockholders of the said corporation formed a second corporation under 

the name of United Commodity Traders of Iowa, Inc., and it has taken over and 

continued the business of the first corporation incorporated under that name. 

2. Respondent James B. Pepper, an individual whose business address is the 

same as that of the respondent corporation, is now, and was at all times 

material herein, a vice-president of the respondent corporation and was 

responsible for the corporate acts and transactions hereinafter described. 

3. a. At the times hereinafter stated, the respondent corporation, in the 

regular course of its business as futures commission merchant, carried accounts 

of customers who traded in commodity futures on contract markets subject to the 
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provisions of the Commodity Exchange Act and the regulations thereunder. Such 

accounts, the trading therein, and the handling and disposition of funds in 

connection therewith, were subject to the provisions of the said act and 

regulations. At all such times, the respondent corporation had to its credit 

with banks or other depositories sums of money in varying amounts, held in 

segregated accounts and identified as customers' funds, representing deposits of 

margin by and trading profits accruing to such customers. 

b. During the period between July 1, 1968, and August 8, 1968, both 

inclusive, the respondent corporation was continuously undersegregated in 

amounts ranging from $ 1,423.85 on July 1, 1968, to $ 2,759.85 on August 5, 

1968, that is, throughout the period specified above, the total amount of 

customers' funds held in segregation as above described, was from $ 1,423.85 to 

$ 2,759.85 less than the amount necessary to pay all credits and equities due to 

such customers. 

c. Under the regulations issued pursuant to the Commodity Exchange Act the 

respondent corporation was obligated during the period specified above to 

prepare and maintain a daily computation and record setting forth the amount of 

money, securities and property of its customers required to be held, and held, 

in 

segregated accounts in accordance with the requirements of section 4d(2) of the 

Commodity Exchange Act (7 U.S.C. 6d(2)). On the daily computation and record 

that was prepared and kept by the respondent corporation to meet the 

requirements of the regulations during the period specified above, the 

respondent corporation showed that it had excess funds in segregation, whereas, 

in truth and in fact, the said corporation was undersegregated as stated above. 

4. Prior to the acts and omissions described in paragraph 3 above, 

examination of the records of the respondent corporation by the Commodity 

Exchange Authority as of May 31, 1968, revealed that the firm was in an undersegregated condition on various dates in May 1968. On July 9, 1968, the 

Director of the Authority's Accounting and Licensing Division wrote a letter to 

respondent James B. Pepper in his capacity as vice-president of the respondent 

corporation, calling attention to the under-segregated condition of the firm 

revealed by the Authority's examination of its records as of May 31, 1968, 

informing him of the requirements of the Commodity Exchange Act relating to the 

treatment and handling of customers' funds, and affording the firm an 

opportunity to bring itself into compliance. 

CONCLUSIONS

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

that, as charged in the complaint, the respondents violated §§ 4d(2) and 4g of 

the Commodity Exchange Act (7 U.S.C. 6d(2) and 6g) and §§ 1.20, 1.21, 1.22, 

1.23, 1.32 and 1.35 of the regulations thereunder (17 CFR 1.20, 1.21, 1.22, 

1.23, 1.32 and 1.35). 

The complainant states that the administrative officials of the Commodity 

Exchange Authority have carefully considered the stipulation and waiver 

submitted by the respondents. The administrative officials believe that the 

prompt entry of the proposed order would constitute a satisfactory disposition 

of this case, serve the public interest and effectuate the purposes of the 

Commodity Exchange Act. The complainant recommends, therefore, that the 

stipulation and waiver be accepted and that the proposed order be issued. 

It is concluded that the complainant's recommendation should be adopted. 

ORDER

United Commodity Traders of Iowa, Inc., also d/b/a Jada Corporation, United 

Commodity Traders of Iowa, Inc. (incorporated on September 3, 1968) and James B. 

Pepper shall cease and desist from: (1) failing to keep in segregated account 
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the amount of money, securities and property which must be in segregated account 

in order to comply with the requirements of section 4d(2) of the Commodity 

Exchange Act (7 U.S.C. 6d(2)); and (2) failing to prepare and maintain an 

accurate record as of the close of the market on each business day of the amount 

of money, securities, and property which must be in segregated account in order 

to comply with the requirements of section 4d(2) of the Commodity Exchange Act 

(7 U.S.C. 6d(2)). 

A copy of this Decision and Order shall be served on each of the parties. 

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