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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 

DOCKET NUMBER: 54 

DATE: MARCH 12, 1952 

DOCUMENT TYPE: REFEREE'S REPORT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re George Sirota and Sons, George Sirota, Norman L. Sirota, Benjamin 

Sirota, Harry A. Aspinwall, and Dyke Cullum, Respondents 

CEA Docket No. 54 

Referee's Report 

Preliminary Statement 

This is a disciplinary proceeding under the Commodity Exchange Act (7 U.S.C., 

Chapter I), instituted by a complaint issued under section 6(b) of the act (7 

U.S.C. 9) on November 6, 1950, by Charles F. Brannan, Secretary of Agriculture, 

hereinafter called the complainant or the Government. There are six respondents 

named in the complaint: a partnership, three individual partners, an agent or 

employee of the partnership, and a customer of the firm. Respondent George 

Sirota and Sons is a New York partnership which deals in edible oils and other 

commodities for its own account and for the account of customers. The 

partnership is a member of various contract markets, including the New York 

Produce Exchange, and is registered as a futures commission merchant under the 

act. Respondent George Sirota, Norman L. Sirota, and Benjamin Sirota are 

partners in the firm and each is registered as a floor broker under the act. 

Respondent Harry A. Aspinwall is a member of the New York Mercantile Exchange 

and 

the Chicago Mercantile Exchange; he is registered under the act as an agent to 

solicit commodity futures orders for the respondent George Sirota and Sons; and 

he is registered as a floor broker under the act. Respondent Dyke Cullum, Hibbs 

Building, Washington, D. C. is an individual who traded in commodity futures as 

a customer of respondent George Sirota and Sons. 

The Complaint 

The complaint charges that respondent George Sirota and Sons 

(1) Wilfully failed to report market positions of customers, as required by 

section 4i of the act, 7 U.S.C. 6i. (Complaint, paragraph 7); 

(2) Used the funds of one customer to margin or guarantee the trades of 

another, in violation of section 4d(2) of the act, 7 U.S.C. 6d(2). (Complaint, 

paragraph 8); and 

(3) Wilfully failed to evidence futures contracts by a written record showing 

the true names of the parties, as required by section 4 of the act, 7 U.S.C. 6 

(Complaint, paragraphs 9, 10) 

The respondent Harry A. Aspinwall is charged with 
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(1) Wilful failure to evidence futures contracts by a written record showing 

the true names of the parties, as required by section 4 of the act, 7 U.S.C. 6 

(Complaint, paragraph 9) 

The respondent Dyke Cullum is charged with 

(1) Wilful failure to report transactions and market positions, as required 

by section 4i of the act, 7 U.S.C. 6i. (Complaint, paragraph 6) 

The charges of failure of the respondent George Sirota and Sons and of the 

respondent Dyke Cullum to report, pursuant to section 4i 

of the act, as mentioned above, are based upon the allegation (see Complaint, 

paragraphs 6, 7) that 

On June 23, 1950, respondent Dyke Cullum purchased five contracts of soybean 

oil futures for his own account through the respondent George Sirota and Sons 

under an arrangement with the latter whereby, for purposes of concealment, these 

contracts were entered in accounts carried in the names of Jessica K. Jones and 

Kiki Cullum; that these five contracts, when added to respondent Dyke Cullum's 

existing position, placed him in reporting status and also subjected the 

respondent George Sirota and Sons to the requirement that it file reports; and 

that neither of these respondents filed such reports. 

The charge of misuse of customer's funds by the respondent George Sirota and 

Sons is based upon the allegation that 

On May 22, 1950, respondent Dyke Cullum deposited $ 10,500 to margin his 

account and that the respondent partnership, without authority, credited $ 3,500 

of the said sum to the account of Jessica K. Jones (Complaint, paragraph 8) 

The charge of failure of the respondent partnership and of respondent Harry 

A. Aspinwall to keep written records showing the true parties to futures 

contracts are based upon the allegation (See Complaint, paragraph 9) that 

These respondents opened an account on the firm's books in the name of 

Jessica K. Jones without her authority or consent, and thereafter entered 

various trades in such account which were actually executed for the account and 

benefit of another person. 

An additional charge of failure of the respondent partnership to keep written 

records showing the true parties to futures contracts is based also upon the 

allegation (See Complaint, paragraph 10) that 

On or about June 23, 1950, in connection with the purchase of five contracts 

of soybean oil futures for Dyke Cullum, adverted to above, such contracts were 

entered in the accounts of Kiki Cullum and Jessica K. Jones for the purpose of 

concealing ownership thereof by Dyke Cullum. 

The complaint also alleges that 

All the respondents agreed and planned with each other to operate and they 

did operate the three above accounts in a manner calculated to conceal open 

contract positions and evade the reporting requirements of the Commodity 

Exchange Act. (Complaint, paragraph 5) 

The Answers 

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 the jurisdictional allegations of the complaint, including the 

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

the firm carried accounts in the names of 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. 
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Respondent Harry A. 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, such denial being based upon an affirmative 

defense which will be subsequently discussed. 

Hearing 

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

Agriculture, was assigned as referee and presided at the hearing. 

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

Sirota were represented by Donald Marks of Baer & 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, Washington, D. C., represented the complainant. The hearing 

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. 

In a document filed on March 22, 1951, the referee declared the record closed. 

Two witnesses testified for the complainant and 8 for the respondents. 2058 

pages of testimony were taken. 39 exhibits were received in evidence on behalf 

of the complainant and 83 on behalf of the respondents. Suggested findings of 

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

parties to the proceeding. 

Filing of the Complaint 

On May 5, 1950, Dyke Cullum entered into an agreement with George Sirota and 

Sons to enter into a joint venture for the purchase and sale of 20 tank cars of 

cottonseed oil from the United States Department of Agriculture. George Sirota 

and Sons agreed to furnish a bank letter of credit for the transaction, 

amounting to $ 183,000, and Dyke Cullum deposited with George Sirota and Sons 

the sum of $ 90,000 as a credit to his commodity account, said sum to be 

returned 

to him upon completion of the transaction plus half of the profits or less half 

of the losses. Said transaction was liquidated on July 18, 1950 by payment to 

Cullum of the sum of $ 90,000 plus the sum of $ 3236.06 profits, plus other 

minor adjustments. (Transcript pp. 553, 559, 570). Prior to the liquidation of 

the account and payment of said sums to Dyke Cullum, George Sirota and Sons had 

transferred from the Dyke Cullum unregulated account to the Dyke Cullum 

regulated account and to the regulated Kiki Cullum and J. K. Jones accounts, to 

cover margin requirements, portions of the funds credited to the Dyke Cullum 

unregulated accounts; but such transfers were reversed upon demand of Dyke 

Cullum and the unregulated account was closed out by payment of the full amount 

of the credits therein to Dyke Cullum upon the liquidation of the spot oil 

transaction on July 18, 1950. (Transcript pp. 570-573). In addition to the 

controversy engendered by the above spot oil transaction, the respondent Cullum 

and the respondent partnership were in strong disagreement over the accountings 

rendered by the firm in connection with respondent Cullum's trades in his 

regulated account. Respondent Cullum testified that he repeatedly threatened 

"to go to the Commodity Exchange Authority." (T. p. 559). On July 19, 1950, the 

respondent partnership informed the New York branch office of the Commodity 

Exchange Authority of the facts regarding the open positions in the Dyke Cullum, 

Kiki Cullum, and Jessica K. Jones accounts and that it was the firm's opinion 

that Dyke Cullum had oral authority to trade in the Kiki Cullum and J. K. Jones 

accounts (Tr. pp. 1233, 1323-1324). The 
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testimony of Charles E. Robinson, the Commodity Exchange Authority employee in 

New York to whom Benjamin Sirota talked, was that Benjamin Sirota advised him 

that the firm felt that the positions in the three accounts should have been 

combined and reported but that the firm had overlooked it because of a labor 

shortage in the office. The reports were subsequently filed. (Tr. pp. 350, 

359, 366, 367). Respondent Cullum went to the offices of the Commodity Exchange 

Authority in Washington on July 31, 1950 (Tr. p. 8) and filed an oral complaint 

against the respondent firm in which he accused the firm and Aspinwall of 

engaging in questionable practices under the act. 

Based upon the above disclosures, further investigation, and other 

information in the form of written documents, the Commodity Exchange Authority 

filed the complaint herein. 

Although it has no significant bearing upon the ultimate issues in this 

proceeding, it may be mentioned in passing that prior to the hearing of this 

case there was pending in the District Court of the District of Columbia a civil 

suit filed by respondent Cullum against the respondent partnership and 

respondent Aspinwall involving the same accounts and transactions which are the 

subject of this proceeding. 

For convenience, the Jessica K. Jones account will be hereinafter referred to 

as the J. K. Jones account. The firm of George Sirota and Sons will be referred 

to as the partnership, the firm, or the Sirotas. 

Evidence Concerning Failure to Report 

(Paragraphs 6 and 7 of the Complaint) 

As indicated in the above paragraphs, the sale and purchase on which this 

charge is based took place on June 23, 1950. Respondent Cullum testified that 

on the same date he addressed a letter to the respondent partnership at its 

request confirming the trades (Govt. Exhibit 1; T., pp. 534 536) n1 He also 

testified that he was coerced into the arrangement by the Sirotas and described 

the conditions and circumstances under which the trades or switch were made. 

(T. 533-539). The substance of this testimony was that he did not want to get 

into a reporting status and relied upon Aspinwall's assurance that Aspinwall 

would make all arrangements to obtain authority from Kiki Cullum 

and J. K. Jones that wore necessary (T. pp. 535-536)). n2 Further, that the 

Sirotas and he were engaged in a controversy regarding his non-regulated account 

in which he deposited $ 90,000 (T. p. 536). George Sirota testified that there 

was no coercion, that respondent Cullum consulted him and he advised Cullum that 

he could switch his 

five long July contracts n3 into five long Septembers, or that in the 

alternative he could take delivery of the five Julys on the delivery date. He 

testified further that, at Cullum's request, the switch was made, with George 

Sirota and Sons taking the other side of the trades at thirty points difference, 

and that the letter of June 23, 1950, was requested because the firm needed 

written authority from Dyke Cullum to take the other side of the trades (T. pp. 

902-903, 913-921, 961-965). 

n1 The letter reads as follows: 

6/23/1960 
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George Sirota & Sons 

60 Bearer St. 

New York 4, N. Y. 

Dear Sir: 

This serves as your authorization, confirming our telephone 

conversation, whereby you may transfer five car loads of July Soy bean oil 

from my account to your account, also transfer five car loads of September 

soy bean oil from your account to the following accounts: 

3 -- Kiki Cullum 

2 -- J. K. Jones 

Respectfully, 

/s/ Dyke Cullum 

n2 Respondent Cullum's Exhibit 1 is a letter from respondent Aspinwall 

to respondent Cullum: 

George Sirota & Sons 

New York Cotton Exchange Building 

60 Beaver Street 

New York 4, N.Y. 

June 26, 1950 

Mr. Dyke Cullum 

Hibba Building 

15th Street, N. W. 

Washington, D. C. 

Dear Dyke: 

In order that our files may be complete, have the attached form 

completed for Kiki and "Buck" 

In connection with our request of Friday, may we have a letter 

confirming the acceptance of the two Sept oils from George Sirota & Sons. 

We should also like a similar letter from Kiki on the remaining three. 

It certainly is a pleasure to work with you and please do not hesitate 

to call on me if there is anything I can do to help you. With my kindest 

and deepest regards, I am 

Sincerely, 

/s/ Harry 

Harry Aspinwall 

n3 See footnote 1, above. 

Evidence Concerning Misuse of Customers' Funds 

Paragraph 8 of the complaint charges that, 

On or about May 22, 1950, respondent Dyke Cullum deposited with respondent 

George Sirota and Sons the sum of $ 10,500 to margin, guarantee and secure 

trades made in the Dyke Cullum account. Respondent George Sirota and Sons, 

without authority from respondent Dyke Cullum, entered $ 3,500 of the said sum 

to the credit of the account carried in the name of Jessica K. Jones or Joycette 

K. Jones, in violation of section 4d(2) of the Commodity Exchange Act and of 

sections 1.20 and 1.22 of the rules and regulations. 

The government in its brief states that it is of the opinion that the 

evidence developed at the hearing shows that the Sirotas were justified in 
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entering $ 3,500 of the 10,500 check to the credit of the account carried in the 

name of J. K. Jones, In view of this statement we must conclude that the 

disciplinary aspect of paragraph 8 of the complaint is no longer in issue. It 

may be noted, however, that respondent Cullum testified that he did not 

authorize the Sirotas to credit $ 3,600 of his money to the J. K. Jones account 

and that he 

 

protested this action to no avail. (T. pp. 15-16, 33-36, 38-40; 512-513, 566-

577, 836-839) (Govt. Exhibit 6, 7, 8). He stated that on May 20 Aspinwall came 

to his office in Washington and asked him for 10,600 margin, pursuant to which 

he issued him a check for $ 10,500 (Govt. Ex. 6). Cullum claimed that the 

margin was meant only for his own account (T. p. 613). Respondents Benjamin 

Sirota and Harry Aspinwall testified that the money was credited to the Jones 

account at the express direction of Cullum (T. pp. 1043, 1723-1724, 1795-1799, 

1810-1811, 1826). The Sirota testimony is also to the effect that Aspinwall and 

the Sirotas' bookkeeper informed Cullum specifically by letter and statements of 

account that his account needed $ 7,000 margin and the J. K. Jones account 

needed $ 3,500, and that Aspinwall gave the statement of the accounts to Cullum 

in Washington on May 20 when he received Cullum's check for $ 10,500. (T. pp. 

1795, 1796). Sirota Exhibit 13 is a letter and memo from the Sirotas to Cullum 

dated May 18, 1950, showing that Cullum's account needed a margin of $ 7,000. 

The record shows that on July 18, 1960, Cullum deposited with the Sirotas the 

sum of $ 40,000 to cover margins in the followin: Dyke Cullum account $ 14,806 

Kiki Cullum account, $ 14,661, and J. K. Jones account $ 8,365 (T. pp. 567-568; 

Sirota Exhibits 48a, b, c). 

Evidence Concerning Failure to Maintain Written Record Showing the true names 

of the parties (Paragraphs 9, 10 of the complaint). n4 

n4 In this connection, Government Exhibits 3, 4, and 6 are 

transcriptions of trading transactions in the regulated accounts of Dyke 

Cullum, Kiki Cullum and J. K. Jones respectively. 

I. Opening of, and trading in, J. K. Jones' account. (Paragraph 9). 

 

Respondent Cullum's direct testimony is substantially as follows: 

On June 17, 1950, in New York, George Sirota told Cullum that he wanted him 

to become a member of his "team" consisting of George Sirota, Benjamin Sirota, 

Norman Sirota, Harry Aspinwall, and Ralph Moore, to engage in the purchase of 

soybean oil; that the plan was, at that time, to control the market as Sirota 

thought that soybean oil could be forced up to around 20 cents a pound; that 

Ralph Moore was to make purchases of soybean oil when the Sirotas did and was to 

assist in obtaining information in Washington concerning what the ECA and the 

Department of Agriculture were doing and transmit that information to George 

Sirota (T. pp. 498-501); that George Sirota wanted Cullum to participate in the 

J. K. Jones account and to obtain information from the Senate Agriculture 

Committee; that Cullum told Sirota that he would not do such a thing as he was 

already heavily involved in soybean oil and wanted to start liquidating his 

account. (T. pp. 501, 502, 503.) 

Cullum denied that he opened the J. K. Jones account (T. 525). He testified 

that it was opened by Harry Aspinwall; that Harry Aspinwall and George Sirota 

stated they wanted to do something to help Senator Thomas in his campaign, and 

that the only way they could give him money "was through some manipulation in 

the market, either by opening an account in his own name, . . . . or have 

someone else open an account" (T. p. 525). Cullum testified that he told 

Aspinwall that he would not open such an account because if he (Cullum) wanted 

to help Senator Thomas 

 
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he would give him cash instead. He testified that Aspinwall was trying to get 

employed on the Senate Agriculture Committee (T. p. 526); that Aspinwall 

suggested that he, Cullum, open up an account in the name of Joycette K. Jones; 

and that Aspinwall suggested that Cullum phone Miss Jones, obtain her consent to 

use her name and "we will finance it" (T. p. 527). Cullum testified that on or 

about May 6 he told Aspinwall that it would be all right if Miss Jones gave her 

consent because the opening of an account was her business and that he (Cullum) 

had no control over that. Cullum testified that Aspinwall said that he was 

going to call Miss Jones on the phone and get her permission to open the account 

and that he (Cullum) said it was all right by him (T. p. 527). Cullum testified 

that on Sunday, May 7, just before leaving for Chicago, he phoned Miss Jones and 

told her that she would receive a phone call from Aspinwall; that on May 8 he 

received a phone call in Chicago from Miss Jones advising him that Aspinwall had 

phoned her but that she was uncertain as to exactly what he wanted but that he 

did seem to want her permanent address that he (Cullum) told her to give him her 

permanent address but also to be sure and find out what he wanted. (T. p. 527). 

Cullum also testified that on the following Saturday Aspinwall came to his 

office and told him he had opened the account; that he (Cullum) didn't know how 

it was done; that he (Cullum) didn't put any money in the account; and that he 

was therefore not responsible for the account. (T. p. 527-528). 

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

Commodity Exchange Authority, who investigated the matters 

 

herein on behalf of the Government, testified as to what respondent Cullum told 

him regarding the opening of the J. K. Jones account. In substance, Cullum 

advised him as follows: Aspinwall had been trying to get a job with the Senate 

Agriculture Committee and felt that his chances would be enhanced if he made 

some money in the commodity market for Senator Elmer Thomas who was Chairman of 

that Committee. Aspinwall suggested to Cullum that he, Aspinwall, should open 

an account in the name of Jessica K. Jones (the real person being Joycette K. 

Jones), Secretary or Clerk of the Committee. Aspinwall also suggested the use 

of the name Jessica to conceal the account a little better and stated that she 

could still endorse the checks "J. K. Jones." Cullum remonstrated, stating he 

doubted whether Miss Jones would stand for this, but he, Cullum, allowed 

Aspinwall to go ahead and work it out. On this basis the J. K. Jones' account 

was opened (T. p. 73, 74). 

Miss J. K. Jones did not appear as a witness at the hearing. She was 

interviewed in Washington, D.C. by witness Bagnell and questioned as to the 

facts regarding the opening of the account. Mr. 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, 1960, 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 
Page 8 

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 know 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 

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. 

Aspinwall's testimony regarding the opening of the J. K. Jones account is 

substantially as follows: 

On May 8, 1950, Cullum purchased a quantity of soybean oil through the 

Sirotas and told Aspinwall over the phone to "Put that in the Jones account" (T. 

p. 1787). Later in the same day in another phone conversation Cullum assured 

Aspinwall that Miss Jones would call up to confirm the trades and furnish her 

address, whereupon Aspinwall said, "Be sure and have her call, Dyke." (T. p. 

1788). Aspinwall then informed the Sirotas that a person named J. K. Jones 

would call from Washington and for them to take all necessary 

 

information from her. The call was received by Bernie Rosenbaum, an employee of 

the Sirotas, and Miss Jones identified herself as Jessica K. Jones, c/o Buck 

Jones, Odessa, Texas. (T. pp. 1788, 1789). Aspinwall characterised as a 

fabrication Cullum's statement that the Jones account was opened to make money 

for Senator Thomas. 

The testimony of the Sirota respondents regarding the opening of the J. K. 

Jones' account was substantially the same as that of Aspinwall's. They 

categorically denied Cullum's story that Aspinwall and the Sirotas opened the 

account, without his participation or approval, and that the plan was to make 

money for Senator Thomas. They point out, in their brief, the discrepancies in 

Cullum's testimony regarding his professed lack of knowledge of the J. K. Jones 

account. They refer to Cullum's inquiries regarding profits in that account and 

the Kiki Cullum account. n5 They testified that duplicate statements of accounts 

and adjustments in the accounts were mailed to Cullum. They point out several 

instances wherein Cullum furnished margins for the J. K. Jones and Kiki Cullum 

accounts (Government Exhibit 6; Sirota Exhibits 48a, b, c). 

n5 Government Exhibit 2a is a memo from Cullum to the Sirotas, readings: 

"On 6/26/50 Kiki Cullum and JKJ each bought 4 -- Dec. CSO. You failed 

to send duplicate statements of the profits. 

DC" 

 

II. Opening of, and trading in, the Kiki Cullum account (paragraph 10 of the 

Complaint). 

There is no charge in this case of irregularity in the opening of this 

account. Under paragraph 10 it is charged, however, that the September 

purchases involved in the July-September switch of June 23, 1950, were 

improperly entered in the account (and also in the J. K. Jones account) and that 

in the absence of proper authorization to make the entries in such accounts, the 

respondent firm executed contracts without showing in the accounts the true 

names of the parties to the contracts. 

Cullum testified that Kiki Cullum opened this account herself; that she put 

up her own money; that she authorized the purchase of two contracts of soybean 
Page 9 

oil; that she owned and controlled the account (T. pp. 524, 525); that she 

became interested in soybean oil when he (Cullum) told her he was operating in 

that commodity (T. p. 529); that he (Cullum) told Aspinwall that he would write 

Kiki Cullum a letter advising her of his going into the market; and that 

Aspinwall said that if she would open an account with him, he (Aspinwall) would 

guarantee that she could got two contracts at 11.25 cents per pound. (T. p. 

530). Cullum testified further that Kiki Cullum informed him ten days later 

that she had bought two contracts of soybean oil through the Sirotas and that 

she sent a $ 2,000 check to cover the margins. (T. p. 531). Cullum testified 

that on June 26 Harry Aspinwall wrote 

 

him a letter requesting him to obtain powers of attorney from Kiki Cullum and J. 

K. Jones and enclosed blank forms for that purpose. (T. p. 531) n6 Cullum 

testified that the letter represented the first time that the Sirotas called 

upon him to got powers of attorney from Kiki Cullum and J. K. Jones. 

n6 This letter (See footnote 2,) has reference to the July-September 

switch mentioned above. 

Aspinwall's testimony regarding trading in the Kiki Cullum account is 

substantially as follows: 

Some time after he had been executing contracts in various commodities for 

Cullum, he (Cullum) on or about April 22 gave an order for a contract which he 

directed was to be placed in an account for Kiki Cullum (T. pp. 1778-1779). 

Later, Cullum furnished the mailing address for Kiki Cullum as Houston, Texas. 

Cullum was repeatedly asked to furnish powers of attorney to trade in the Kiki 

Cullum and J. K. Jones accounts (T. p. 1782) inasmuch as Cullum was trading in 

such accounts. n7 

n7 A memorandum from Cullum to the Sirotas (Government Exhibit 2) 

states: 

"The two powers of attorney are sent (today) to be executed. As soon as 

they come back, I'll send them to you. 

DC" 

The Issues 

The issues are: 

(1) whether the purchase of June 23 entered in the J. K. Jones and Kiki 

Cullum accounts (Paragraphs 6, 7, and 10 of the complaint) and the other 

transactions entered at various times in the J. K. Jones account (Paragraph 9 of 

the complaint) actually belonged to and were executed for the account and 

benefit of those persons. 

(2) whether the act of crediting $ 3.500 to the J. K. Jones account out of 

funds furnished by respondent Cullum was an unauthorized use of respondent 

Cullum's funds. (Paragraph 8 of complaint) and 

(3) whether Harry Aspinwall was an authorized agent of George Sirota and Sons 

(Paragraph 9 of the complaint). 

Proposed 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 

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 
Page 10 

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 was, at the time of the transactions 

hereinafter described, authorized by the respondent partnership to act as its 

agent and representative in the solicitation of business, including futures 

transactions to be executed on the New York Produce Exchange and such business 

was solicited by the said Harry A. Aspinwall and accepted by the respondent 

partnership. The said Harry A. Aspinwall is registered as a floor broker under 

the act. 

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. At the times hereinafter mentioned, commodity futures accounts in the 

names of Dyke Cullum, Kiki Cullum and J. K. Jones were being carried on the 

books of the respondent partnership. Such accounts had open contract positions 

in cottonseed oil and soybean oil futures on the New York Produce Exchange on 

the dates and in the quantities shown on Schedule A which was attached to and 

made a part of the complaint. 

7. On May 7, 1950, respondent Dyke Cullum informed J. K. Jones that she would 

receive a telephone call from George Sirota and Sons 

 

the next day, and requested her to give the firm her name and her address as c/o 

Buck Jones, Odessa, Texas. On May 8, 1950, respondent Harry A. Aspinwall called 

Miss Jones, but she did not give him the information. Later the same day, 

respondent Dyke Cullum requested Miss Jones to call Aspinwall back and supply 

the information. Miss Jones then called George Sirota and Sons on the same day, 

asked for Mr. Aspinwall and when informed that he was not available spoke with 

Bernie Rosenbaum, an employee of the firm, and gave her name as Jessica K. Jones 

and her address as above described. About one-half hour prior thereto, 

respondent Harry A. Aspinwall had directed the said Bernie Rosenbaum to open an 

account on the books of George Sirota and sons in the name of J. K. Jones and to 

purchase five contracts of soybean oil and place the transaction in the said 

account. Respondent Aspinwall informed Mr. Rosenbaum that Miss Jones would 

telephone and supply a mailing address. In accordance with such instructions, 

five contracts of September soybean oil were purchased and placed in an account 

designated as J. K. Jones. Shortly thereafter Miss Jones made the telephone 

call to George Sirota and Sons described above, and the name of the account was 

changed to Jessica K. Jones. Miss Jones did not order the transaction of May 8, 

1950. She made the telephone call and furnished the information described at 

the express request and direction of respondent Dyke Cullum. 

8. 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 bought and sold and the 

transactions entered in the Jessica K. Jones account. (Government Exhibit 5) 

Miss Jones had no knowledge of or interest in any of these transactions and did 

not authorize anyone to execute them for her. 
Page 11 

9. On May 8, 1950, George Sirota and Sons addressed a letter to Miss Jones in 

Odessa, Texas, requesting original margin for her account. George Sirota and 

Sons knew that Miss Jones was then living in Washington. No reply to this 

letter was received, and George Sirota and Sons did not attempt any contact with 

Miss Jones thereafter until July 20, 1950, when respondent Norman L. Sirota 

telephoned Miss Jones in Washington and requested margin. Miss Jones then 

informed respondent Norman L. Sirota that she knew nothing about the account, 

would have nothing to do with it, and refused to supply any margin funds. 

10. Respondent George Sirota and Sons and 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 the said Jessica K. Jones. The said 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 

said account. 

11. 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 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 places him in reporting status. (see Schedule A, attached to the 

complaint) The said respondent was aware of the reporting provisions of the act 

and regulations, and of the fact that he was obligated to report all reportable 

contracts and positions which he owned or controlled regardless of the name of 

the account in which carried, but the said respondent wilfully failed to report 

to the Commodity Exchange Authority with respect to such purchases and sales and 

the open contracts held or controlled by him on the said dates. 

12. 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 paragraph 11 

above, represented the switching forward 

 

of a July position held by respondent Dyke Cullum; that the respondent Cullum 

hold a long position of twelve contracts in September soybean oil on the New 

York Produce Exchange prior to such purchase; and that the additional five 

contracts executed for his account required the firm to report the status of 

such account. No reports with respect to the status of this account were filed 

by respondent George Sirota and Sons until after July 18, 1950, when, as the 

result of a controversy between Cullum and the other respondents, each party 

went to the Commodity Exchange Authority. 

13. All the respondents agreed and planned with each other to operate and 

they did operate the J. K. Jones and Kiki Cullum accounts in a manner calculated 

to conceal open contract positions and evade the reporting and record keeping 

requirements of the Commodity Exchange Act. 

14. 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. 
Page 12 

15. 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 J. K. Jones account, knowing at the time that the said sum was 

given for the purpose of margining all three accounts. 

16. At all times mentioned herein, respondent Harry A. Aspinwall was an agent 

of the respondent partnership and was authorized by the firm to solicit business 

on its behalf for execution on the New York Produce Exchange. Respondent Harry 

A. Aspinwall acted as the agent of George Sirota and Sons in opening the Jessica 

K. Jones account on the books of the firm, and in the execution of orders in 

that account as described in paragraph 7 above. 

17. 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 by-products thereof, or determining the price 

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

such commodities in interstate commerce. 

Proposed Conclusions 

I 

The complaint charges that respondent Dyke Cullum wilfully failed to file 

reports required under section 4i of the act, and sections 10.10, 10.11, and 

10.21 of the rules and regulations. The provisions in question require reports 

from any person who holds or controls open contracts equal to or in excess of 

900,000 pounds of oil (17 CFR 10.10, 10.11 and 10.21). This quantity is equal 

to 15 

 

contracts or carlots of 60,000 pounds each. Prior to June 23, 1950, respondent 

Cullum held a long position of twelve contracts of September soybean oil, and 

the purchase of five additional contracts on that day brought his long position 

to seventeen contracts. He does not dispute the fact that he failed to file any 

reports nor that his failure was intentional, but takes the position that no 

consent was ever obtained from Jessica Jones or Kiki Cullum to place the trades 

in these accounts, that, for this reason, the purchase of June 23 was never 

consummated and the respondent was not in reporting status. This defense is 

wholly without merit. The purchase was made on the New York Produce Exchange 

with George Sirota and Sons taking the other side and was entered on the firm's 

books and records. Whether Kiki Cullum or Jessica Jones consented to the 

transactions or not is entirely immaterial. Respondent Cullum admits and the 

record shows that the trades were made, that they belonged to him and that they 

were placed in the Jessica K. Jones and Kiki Cullum accounts at his instructions 

and in order to avoid reporting. (Tr. pp. 534-540, 670-671, 686-689, 700-701). 

In fact, he himself characterized the arrangement as "shady". (Trans. pp. 705-

706). Accordingly, we must conclude that he wilfully violated the act and the 

regulations when he failed to report this purchase and the resulting market 

position. 

II 

Under the regulations, each futures commission merchant is required to report 

positions in a customer's account whenever such 

 

positions equal or exceed the quantity established for that purpose (17 CFR 

10.04, 10.05, 10.20). Accordingly, on June 23, 1950, George Sirota and Sons 

became obligated to report Dyke Cullum's long position in September soybean oil 
Page 13 

as seventeen contracts, if the firm knew that the purchase on that date belonged 

to Dyke Cullum. The weight of the evidence is to the effect that George Sirota 

and Sons not only had such knowledge, but actually cooperated with respondent 

Cullum in concealing the trades. In the first place, the transactions were 

originally entered in respondent Cullum's account (Government Exhibit 12). The 

firm then accepted his instructions to transfer the trades to the Jessica Jones 

and Kiki Cullum accounts and this was done (Government Exhibit 1). The purchase 

of the September contracts represented part of a switching transaction whereby 

respondent Cullum shifted one future to a more distant future. The fact that he 

was long July soybean oil and wished to remain long was known to George Sirota. 

According to the latter's own testimony, respondent Cullum discussed the matter 

with him and he (Sirota) suggested the switching transaction and agreed that the 

firm would take the other side of the trades at 30 points difference. Pursuant 

to this agreement the firm bought the July contracts held by Cullum and sold him 

September contracts in an equal amount to take their place. (Tr. pp. 902-920) 

Respondent George Sirota therefore, according to his own testimony, was aware of 

the fact that the long September position which resulted from the purchase of 

June 23 belonged 

 

to Dyke Cullum and merely represented the switching or shifting forward of a 

July position previously held by him. 

Respondent Benjamin Sirota testified that the Jones and Kiki Cullum accounts 

were handled by the firm just as though respondent Dyke Cullum held a power of 

attorney to trade in the accounts (Tr. pp. 1233, 1323-1324). This theory alone 

would have required the accounts to be combined and reported. Section 10.04(b) 

of the regulations provides (17 CFR 10.04(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. 

Section 1.3j of the regulations provides (17 CFR 1.3j): 

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. 

Not only was the firm fully aware of the situation, but it also recognized 

its obligation to report. Mr. Robinson testified that on July 19, 1950, 

respondent Benjamin Sirota visited the Commodity Exchange Authority offices and 

stated that the firm should have reported but had overlooked doing so. This 

testimony was not denied by respondent Benjamin Sirota. Furthermore, it is 

significant that the visit to the Commodity Exchange Authority offices by 

respondent 

 

Benjamin Sirota took place one day after a controversy had arisen between the 

firm and respondent Cullum. In view of all the facts, the only possible 

conclusion is that respondent George Sirota and Sons wilfully failed to report 

the transaction of June 23. 

III 

Section 4 of the act (7 U.S.C. 6) declares it to be unlawful for any person 

to execute a futures contract unless "such contract is evidenced by a record in 

writing which shows . . . . the parties to such contract. . . ." 

Section 1.37 of the regulations provides (17 CFR 1.37): 
Page 14 

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. 

The complaint charges that respondent Harry A. Aspinwall and George Sirota 

and Sons violated these provisions by virtue of executing and entering in the J. 

K. Jones account transactions actually made for the account and benefit of a 

person other than Miss Jones (Complaint, paragraph 9). 

The evidence in this case shows clearly that Miss Jones was not the owner of 

the J. K. Jones account, that respondents Aspinwall and George Sirota and Sons 

had knowledge of that fact, and that they 

 

considered the account as belonging to respondent Cullum. Miss Jones' own 

statement, as contained in Mr. Bagnell's memorandum which was received in 

evidence without objection, denied any knowledge of the account, and it is 

admitted that she placed no orders and furnished no funds. While Cullum's 

version as to how the account was opened differs from that of Aspinwall, neither 

version implicates Miss Jones as a party in interest. According to Cullum's 

testimony, she merely followed his instructions to supply her name and address. 

Aspinwall's testimony on the point is conclusive of the fact that he knew that 

she had nothing to do with the account. He testified that he first heard of the 

account on May 8, when Dyke Cullum called him, ordered the execution of a trade 

and stated: "Put that in the Jones account." His testimony then goes on to 

describe how he (Aspinwall) "was a little bit disturbed about it", how he 

remonstrated with respondent Cullum and warned him about the Commodity Exchange 

Authority, and how Cullum replied that Miss Jones would call and leave her 

address, to which Aspinwall answered: "Be sure and have her call, Dyke" (T. pp. 

1787-1789). Under these circumstances, Aspinwall transmitted the order for 

execution and instructed that it be placed in an account in the name of J. K. 

Jones. He also testified that all subsequent orders placed in the account came 

from Dyke Cullum. He admitted having serviced the account, but made no attempt 

to obtain margin from Miss Jones at any time. His only requests for margin were 

directed to Dyke Cullum. Respondent Aspinwall's actions in connection with 

 

the opening of this account and the carrying of these trades in the name of 

Jones, when he looked only to Cullum for trading directions and for financing, 

is imputable to the firm since he was their agent and his acts must be 

considered as the acts of George Sirota and Sons (7 U.S.C. 4). 

In this connection, the answer filed by respondent Aspinwall denies "that he 

was or is authorized to act as agent in the acceptance of commodity futures 

orders and in the name of George Sirota and Sons" (Aspinwall Answer, paragraph 

2). The evidence indicates otherwise. The answer filed on behalf of George 

Sirota and Sons admits the allegation in the complaint that respondent Aspinwall 

was so authorized. George Sirota's testimony expressly confirmed that admission 

(T. p. 956). In the application of George Sirota and Sons for registration as a 

futures commission merchant for the year 1950, Harry A. Aspinwall's name appears 

under the item entitled "Agents . . . authorized by applicant to solicit and 

accept commodity futures orders for, and in the name of, applicant. . . ." 

(Government Exhibit 15). If more evidence is needed it exists in the admitted 

fact that the accounts and the transactions which form the basis of this 

proceeding were solicited and brought in by Harry Aspinwall and accepted without 

question by the firm. 

The evidence discloses that George Sirota and Sons was directly aware of the 

fact that Miss Jones did not own the account. It also indicates clearly that 

the firm regarded Cullum as the owner. No 
Page 15 

 

representative of the firm ever made any serious attempt to obtain margin from 

Miss Jones. The first letter containing such a request was addressed to her on 

May 8, 1950, at Odessa, Texas, despite the fact that on the same day she had 

called George Sirota and Sons from Washington and it was known that she was in 

Washington and not in Odessa, Texas. This letter, then, was merely a gesture. 

Although no reply to this letter was ever received by the firm, no further 

effort was made to contact Miss Jones until Norman L. Sirota's telephone call to 

her in Washington on July 20. In the meantime, on May 22, the firm called on 

respondent Cullum to margin the Jones account, and after receiving $ 10,500 from 

him, credited $ 3,500 of this sum as margin for the Jones account. On July 18, 

1950, the firm received $ 40,000 from Dyke Cullum, part of which, according to 

the testimony of George Sirota, was accepted as margin for the Jones account (T. 

pp. 908-911, 932). George Sirota and Sons had nothing in writing to show that 

Dyke Cullum had agreed to be financially responsible for the Jones account, but 

it is obvious that the firm proceeded on the theory that the account was in fact 

his, and that he was responsible for it, since the firm accepted Cullum's money 

to margin the account. 

The complaint charges further that respondents George Sirota and Sons 

violated Section 4 of the act and section 1.37 of the regulations by virtue of 

the transaction of June 23, 1950. (paragraph 10 of the complaint) The 

circumstances under which these trades were 

 

made and reported are fully described in II above and need not be repeated here. 

Aside from any knowledge that George Sirota and Sons had as to the status of the 

Jones account, the evidence shows beyond any doubt that on June 23, 1950, the 

firm knowingly bought futures for Dyke Cullum and entered the purchases in 

accounts carried in the name of Jessica K. Jones and Kiki Cullum. By doing so 

it wilfully violated the above cited section of the act and regulations. 

The failure of the Sirotas to indicate by a writing or notation on the ledger 

accounts of J. K. Jones and Kiki Cullum that Dyke Cullum was trading and 

furnishing margins in the two accounts made the firm liable for the consequences 

of such failure. The use of the names of J. K. Jones and Kiki Cullum, under the 

circumstances, constituted false entries under the act. Irving Weis & Co. v. 

Brannan, 171 F 2d 232, 234 (C.C.A.2, 1948). 

IV. 

As stated above, the disciplinary aspect of paragraph 8 of the complaint is 

not an issue in this case. However, the facts developed at the hearing 

regarding margins put up by Cullum prevent any conclusion that the Sirotas were 

not justified in using his funds to margin the J. K. Jones account. On May 22 

Cullum's account required approximately $ 7,000 for margin and the Jones account 

required approximately $ 3,500 for that purpose. Cullum delivered a check to 

Harry Aspinwall for $ 10,500, the exact amount needed to cover margins in both 

accounts. Again, on July 18, 1950, he delivered a check for $ 40,000 to the 

firm, but despite the fact that this was the approximate amount required to 

 

margin his account and the Kiki Cullum and Jonas accounts, he contends that the 

sum was delivered only for the purpose of supplying margin to cover his own 

account. There is no merit to this contention. The evidence shows that he 

played an important role in the opening of the Jones account and requested 

statements as to transactions and profits that account (Government Exhibit 2A). 

In connection with the switching transaction of June 23, he admits that he 

authorized the firm to place his trades in the Jones account (Government Exhibit 

1). The evidence plainly shows that it was only after losses resulted in the 
Page 16 

Jones end Kiki Cullum accounts that Cullum and the Sirotas came to the final 

parting of the ways. 

Rulings on Suggested Findings of Fact and Conclusions Filed by the Parties 

Each of the parties filed briefs and arguments, as permitted by the rules of 

practice under the act. Also, the complainant filed fourteen suggested findings 

of fact; the Sirotas filed eighteen suggested findings of fact; the respondent 

Cullum filed nine suggested findings of fact; and the respondent Aspinwall 

requested that the findings of fact suggested by the Sirotas be made applicable 

to him. In this record of over 2,000 pages practically all of the testimony is 

conflicting. The testimony of the government is adverse to all of the 

respondents and, in addition, the testimony offered in behalf of the Sirotas and 

Aspinwall is squarely in conflict with that offered by the respondent Cullum. 

In like manner the findings of fact suggested by the parties are, for the most 

part, diverse and conflicting. 

The examiner, in the Conclusions of this report, has assigned reasons for 

adopting the findings of fact therein which, in his opinion, finds support in 

the evidence of record. The discussion of the evidence, the findings of fact, 

and the conclusions contained in the report give appropriate weight to the 

contentions and proposals filed by the parties, including all suggested findings 

of fact, and it is therefore unnecessary to rule seriatim herein on each group 

of findings proposed by the parties. 

Sanctions 

The violations of all respondents were characterized by the motive of 

concealment and evasion. They were therefore, wilful and require an effective 

sanction. The proposed order is based upon a careful consideration of the 

various factors involved and the fact that all respondents participated 

practically in the same degree in the acts which constituted violations of the 

act. 

Proposed Order 

Effective on the 30th day after the date of this order, all contract markets 

shall deny all trading privileges to respondents George Sirota and Sons, George 

Sirota, Benjamin Sirota, Norman L. Sirota, Harry A. Aspinwall, and Dyke Cullum 

for a period of 15 days. 

A copy of this decision and order shall be sent by registered mail to each of 

the respondents and to each contract market under the act. 

/s/ John J. Curry 

John J. Curry 

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