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Commodity Futures Trading Commission 

CEA CASES 

NAME: A. E. MOOERS CO., INC., AND FRANK H. TOTMAN, SR. 

DOCKET NUMBER: 190 

DATE: MAY 19, 1972 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: A. E. Mooers Co., Inc., and Frank H. Totman, Sr., Respondents 

CEA Docket No. 190 

Complaint and Notice of Hearing Under the Commodity Exchange Act 

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

Exchange Act (7 U.S.C. 1 et seq.) and the regulations made pursuant thereto, and 

in accordance with the provisions of sections 6(b) and 6(c) of the said Act (7 

U.S.C. 9 and 13b), this complaint and notice of hearing is issued stating the 

charges in that respect as follows: 

I 

Respondent A. E. Mooers Co., Inc., is now, and was at all times material 

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

Maine, with its offices at 93 Bangor Street, Houlton, Maine 04730. The 

corporation was, at all times material herein, a registered futures commission 

merchant under the Commodity Exchange Act, engaged in trading in commodities for 

future delivery for the accounts of customers and holding for such customers 

sums of money, representing deposits of margins by and trading profits accruing 

to such customers. 

II 

Respondent Frank H. Totman, Sr., an individual whose business address is the 

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

herein, President of the corporation and at all such times the operations of the 

corporation were under his direction and control. 

III 

During the period from June 30, 1969, through July 26, 1971, the corporate 

respondent, while engaged in business as futures commission merchant under the 

Commodity Exchange Act, failed to meet the minimum financial requirements 

prescribed by section 1.17 of the regulations (17 CFR 1.17) issued by the 

Secretary of Agriculture under section 4f of the Act (7 U.S.C. 6f), and 

concealed such failure by submitting reports to the Commodity Exchange Authority 

on CEA Form 1-FR which purported to show that the respondent corporation met 

such requirements when, in truth and in fact it did not: 

(a) The corporation submitted a financial report on Form 1-FR to the 

Commodity Exchange Authority as of June 30, 1969, signed by respondent Frank H. 

Totman, Sr., which purported to show that its current assets exceeded its 

current liabilities by an amount in excess of $ 93,000 and that it met the 

minimum financial 
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requirements prescribed by section 1.17 of the regulations, whereas such was not 

the case. Analysis of a financial statement of the respondent firm as of June 

30, 1969, prepared for it by Brooks & Carter, its outside certified public 

accountants, reveals that, when the items shown as current assets and current 

liabilities on such statement are classified in accordance with the definitions 

contained in section 1.17 of the regulations, the financial statement showed 

current liabilities of over $ 240,000 and current assets of approximately $ 

135,000 which were not shown on the report on Form 1-FR. Further, the analysis 

of the aforesaid financial statement reveals that as of June 30, 1969, the 

respondent corporation's current liabilities exceeded its current assets by 

approximately $ 14,000. 

(b) The respondent corporation submitted a financial report on Form 1-FR to 

the Commodity Exchange Authority as of December 31, 1969, signed by respondent 

Frank H. Totman, Sr., which purported to show that its current assets totaled 

almost $ 150,000 while its current liabilities were less than $ 50,000, and that 

it met the minimum financial requirements prescribed by section 1.17 of the 

regulations. Examination of the books and records of the respondent corporation 

by the Commodity Exchange Authority revealed that this report, like the report 

of June 30, 1969, failed to show the respondent firm's true financial condition. 

Although 

the report showed as a current asset the cash surrender value of life insurance 

policies in an amount of $ 56,472.16, it did not show that such policies had 

been assigned to the Houlton Trust Company as collateral for an indebtedness of 

$ 47,568.50. Further, the report showed as the respondent firm's total current 

liabilities money borrowed amounting to only $ 47,532, whereas the firm's books 

showed that as of December 31, 1969, it had current liabilities consisting of 

money owed to the Houlton Trust Company of approximately $ 84,000 and owed to 

the First National Bank of Houlton, $ 25,000, a total of about $ 109,000. 

(c) The respondent corporation submitted a financial report on Form 1-FR to 

the Commodity Exchange Authority as of June 30, 1970, signed by respondent Frank 

H. Totman, Sr., which purported to show that its current assets exceeded its 

current liabilities by approximately $ 50,000 and that it met the minimum 

financial requirements prescribed by section 1.17 of the regulations, whereas 

such was not the case. Analysis of the financial statement of the respondent 

corporation as of June 30, 1970, prepared for the firm by the aforementioned 

accounting firm of Brooks & Carter reveals that, when the items shown as current 

assets and current liabilities on such statement are classified in accordance 

with the definitions contained in section 1.17 of the regulations, 

the financial statement showed current liabilities of approximately $ 219,000 

and current assets of approximately $ 51,000 which were not shown on the report 

on Form 1-FR. Further, the analysis of the aforesaid financial statement 

reveals that as of June 30, 1970, the respondent corporation's current 

liabilities exceeded its current assets by almost $ 118,000. 

(d) The respondent corporation submitted a financial report on Form 1-FR to 

the Commodity Exchange Authority as of December 31, 1970, signed by respondent 

Frank H. Totman, Sr., which purported to show that its current assets totaled 

approximately $ 88,000 while its current liabilities totaled only $ 36,000, and 

that it met the minimum financial requirements prescribed by section 1.17 of the 

regulations. Examination of the books and records of the respondent corporation 

by the Commodity Exchange Authority revealed that this report, like the reports 

of June 30, 1969, December 31, 1969, and June 30, 1970, failed to show the 

firm's true financial condition. Although the report showed as a current asset 

the cash surrender value of life insurance policies in an amount of $ 60,751.91, 

it did not show that such policies had been assigned to the New York Life 

Insurance Company as collateral for an indebtedness of approximately $ 53,500. 
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Further, the report showed as the respondent firm's total current liabilities 

money borrowed amounting to only 

$ 36,000, whereas the firm's books showed that as of December 31, 1970, it had 

current liabilities consisting of money borrowed from the New York Life 

Insurance Company, Houlton Trust Company, Summers Fertilizer Co., Inc., Corenco 

Corporation and the First National Bank of Houlton, totaling approximately $ 

206,000. 

(e) Examination of the respondent corporation's books and records by the 

Commodity Exchange Authority as of May 28, 1971, revealed that as of such date 

the firm's current liabilities exceeded its current assets by approximately $ 

136,000. 

IV 

By reason of the facts alleged in this complaint, the respondents, A. E. 

Mooers Co., Inc., and Frank H. Totman, Sr., wilfully violated sections 4f and 

6(b) of the Commodity Exchange Act (7 U.S.C. 6f and 9) and section 1.17 of the 

regulations issued under the Act (17 CFR 1.17). 

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

served upon the respondents and this proceeding shall be governed by sections 

0.1, 0.2, 0.4(b), 0.5 through 0.22 and 0.28 of the rules of practice under the 

Commodity Exchange Act (17 CFR 0.1, 0.2, 0.4(b), 0.5 through 0.22, 0.28). 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 10:00 a.m., local time, on July 11 , 1972, 

in Houlton, Maine, at a place therein to be specified later, before a referee 

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 Act 

and regulations in the manner alleged herein. 

It is ordered that this complaint and notice of hearing be served on the 

respondents at least twenty (20) days prior to the date set for hearing. 

Done at Washington, D. C. 

May 19, 1972 

[SEE SIGNATURE IN ORIGINAL] 

Richard E. Lyng 

Assistant Secretary 

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