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Commodity Futures Trading Commission 

CEA CASES 

NAME: HOHENBERG BROTHERS COTTON COMPANY AND JULIEN J. HOHENBERG 

DOCKET NUMBER: 223; 75-4 

DATE: FEBRUARY 5, 1974 

DOCUMENT TYPE: COMPLAINT 

NOTE: LATER BECAME CFTC DOCKET # 75-4 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Hohenberg Brothers Cotton Company and Julien J. Hohenberg, Respondents 

CEA Docket No. 223 

Complaint and Notice of Hearing Under the Commodity Exchange Act 

There is reason to believe that the respondents have violated the Commodity 

Exchange Act as amended (7 U.S.C. Chapter 1), and this complaint and notice of 

hearing is issued stating the charges in that respect as follows. 

I 

(a) Hohenberg Brothers Cotton Company, a corporation with its principal 

office and place of business at 266 South Front Street, Memphis, Tennessee, is 

now and was at all times material herein operating as a cotton merchant. 

(b) Julien J. Hohenberg, an individual whose business address is the same as 

that of Hohenberg Brothers Cotton Company, is now and was at all times material 

herein the president and principal shareholder of Hohenberg Brothers Cotton 

Company and a member of the New York Cotton Exchange. 

II 

The New York Cotton Exchange is now and was at all times material herein a 

duly designated contract market under the Commodity Exchange Act. 

III 

The allegations of this complaint relate to the purchase and sale of December 

1971 cotton futures contracts on and subject to the rules of the New York Cotton 

Exchange. The first day that this future was open for trading was August 10, 

1970. Trading in this future began on October 2, 1970. The first day on which 

notice of intent to deliver spot cotton in satisfaction of contracts in this 

future (first notice day) was November 23, 1971. The last day on which trading 

in this future was conducted (last trading day) was December 9, 1971. The last 

day on which spot cotton could be delivered in satisfaction of contracts in this 

future (last day to deliver) was December 23, 1971. 

IV 

During the period from February 25, 1971 to November 22, 1971, respondents 

established and maintained a large short futures position in the December 1971 

cotton future. At the beginning of trading on May 5, 1971, respondents' short 

position was 376 contracts, 6.6 percent of the short open interest. At the 

beginning of trading on June 9, 1971, respondents' short position was 914 

contracts, 9.8 percent of the short open interest. At the beginning of trading 

on October 21, 1971, respondents' short position was 735 contracts, 13.9 percent 

of the short open interest. At the beginning of trading on November 23, 1971, 
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first notice day, respondents' short position was 936 contracts, 46.3 percent of 

the short open interest. 

V 

On November 22, 1971, respondent Julien J. Hohenberg, by telephone, advised 

an official of Plains Cotton Cooperative Association, which held a large, long 

position in the December 1971 cotton future, that Plains would be ill-advised to 

accept delivery of spot cotton which respondents planned to tender, on the 

following day, in satisfaction of their open short futures position. 

VI 

On November 23, 1971, first notice day, respondents tendered 357 transferable 

notices of delivery of spot cotton in satisfaction of their open short futures 

contracts. 

VII 

In pursuing the course of action described in paragraphs V and VI above, 

respondents acted for the purpose and with the intent of causing the price of 

the December 1971 cotton future to be abnormally and artificially low on and 

after November 23, 1971. 

VIII 

By reason of the facts alleged in this complaint, respondents attempted to 

manipulate the price of the December 1971 cotton future on November 23, 1971, in 

wilfull violation of sections 6(b), 6(c) and 9(b) of the Commodity Exchange Act 

(7 U.S.C. 9, 13b and 13(b)). 

WHEREFORE, it is hereby ordered that this complaint and notice of hearing be 

served on the respondents. The respondents will have twenty (20) days after the 

receipt of this complaint in which to file with the Hearing Clerk, United States 

Department of Agriculture, Washington, D. C. 

20250, an answer with an original and four copies, fully and completely stating 

the nature of the defense and admitting or denying, specifically and in detail, 

each allegation of this complaint. Allegations not answered will be deemed 

admitted for the purposes of this proceeding. Failure to file an answer will 

constitute an admission of all the allegations of this complaint and a waiver of 

hearing. The filing of an answer in which all of the material allegations of 

fact contained in the complaint are admitted likewise shall constitute a waiver 

of hearing unless a hearing is requested. The respondents are hereby notified 

that unless hearing is waived, a hearing will be held at a time and place to be 

specified later, before an administrative law judge designated to conduct such 

hearing. At such hearing, the respondents will have the right to appear and 

show cause, if any there be, why an appropriate order should not be issued in 

accordance with the Commodity Exchange Act, (1) prohibiting the respondents from 

trading on or subject to the rules of any contract market, and directing that 

all contract markets refuse all trading privileges to the respondents for such 

period of time as may be determined, and (2) directing that the respondents 

shall cease and desist from violating the Commodity Exchange Act in the manner 

alleged herein. 

Done at Washington, D.C. 

February 5, 1974 

[SEE SIGNATURE IN ORIGINAL] 

CLAYTON YEUTTER 

Assistant Secretary 
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