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Commodity Futures Trading Commission 

CEA CASES 

NAME: ARNOLD B. HOLLAND, WILLIAM B. BRODSKY, WILLIAM B. BRODSKY & COMPANY, INC., 

HOLLAND COMMODITIES CORPORATION, AND HOLLAND OVSON COMPANY 

DOCKET NUMBER: 59 

DATE: JULY 20, 1953 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Arnold B. Holland, William B. Brodsky, William B. Brodsky & Company, 

Inc., Holland Commodities Corporation, and Holland Ovson Company, Respondents 

CEA Docket No. 59 

Complaint and Notice of Hearing under the Commodity Exchange Act 

The Secretary of Agriculture has reason to believe that the respondents, 

Arnold B. Holland, William B. Brodsky, William B. Brodsky & Company, Inc., the 

Holland Commodities Corporation, and the Holland Ovson Company, have violated 

the provisions of the Commodity Exchange Act (7 U.S.C., Chapter 1) and the rules 

and regulations made pursuant to its requirements (17 CFR, Chapter 1). In 

accordance with the provisions of section 6(b) of the Commodity Exchange Act (7 

U.S.C. 9), this complaint and notice of hearing is issued alleging as follows: 

I 

Respondent Arnold B. Holland, an individual residing at 787 Baldwin Road, 

Highland Park, Illinois, is now and was at all times material to this complaint 

a member of the Chicago Mercantile Exchange and a registered floor broker under 

the Commodity Exchange Act. 

II 

Respondent William B. Brodsky, an individual residing at 1152 Oak Street, 

Winnetka, Illinois, is now and was at all times material to this complaint a 

member of the Chicago Mercantile Exchange and a registered floor broker under 

the Commodity Exchange Act. 

III 

During the calendar year 1952, respondents Arnold B. Holland and William B. 

Brodsky were officers of and constituted the sole ownership and management of 

the Holland Brodsky Company, a corporation organized under the laws of the state 

of Illinois, with its office and principal place of business at 110 North 

Franklin Street, Chicago, Illinois. The said corporation was registered with 

the Secretary of Agriculture as a futures commission merchant under the 

Commodity Exchange Act, and such registration was due to expire on December 31, 

1952. Upon application made prior to the said date, the said corporation was 

registered as a futures commission merchant for the calendar year 1953, and it 

operated as such until about January 19, 1953. 

IV 

Respondent William B. Brodsky and Company, Inc., a corporation, was organized 

under the laws of the state of Illinois shortly before January 21, 1953, and has 

its office and principal place of business at 
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110 North Franklin Street, Chicago, Illinois. Respondent William B. Brodsky is 

President of the said corporation and the owner of 98 per cent of its capital 

stock, and the membership of respondent William B. Brodsky in the Chicago 

Mercantile Exchange is registered for the benefit of respondent William B. 

Brodsky and Company, Inc., enabling the said corporation to enjoy membership 

trading privileges and clearing privileges on the said exchange. On January 21, 

1953, the said corporation applied for and was registered as a futures 

commission merchant under the Commodity Exchange Act for the calendar year 1953. 

Such registration is now in effect. 

V 

On January 14, 1953, the Holland Brodsky Company notified the Commodity 

Exchange Authority that the corporate name had been changed to the Holland 

Commodities Corporation on December 31, 1952. On January 16, 1953, respondent 

Holland Commodities Corporation applied for registration as a futures commission 

merchant in its new name, and requested the discontinuance of the registration 

of the Holland Brodsky Company as a futures commission merchant. Respondent 

Holland Commodities Corporation was thereupon registered as a futures commission 

merchant under the Commodity Exchange Act for the calendar year 1953. In its 

application for registration, the Holland Commodities Corporation stated that 

respondent Arnold B. Holland was President of the said corporation and the owner 

of 92 per cent of its capital stock. On June 3, 1953, the Holland Commodities 

Corporation 

notified the Commodity Exchange Authority that it had ceased to do business as a 

futures commission merchant. The said notice did not specify or otherwise 

indicate that the said corporation had been dissolved, and its registration as a 

futures commission merchant is still in effect. 

VI 

Respondent Holland Ovson Company, a corporation, was organized under the laws 

of the state of Illinois on or about May 19, 1953, with respondent Arnold B. 

Holland as Vice-President, and Leo D. Ovson and Eugene P. Ovson, not respondents 

herein, as President and Secretary-Treasurer, respectively. The said 

corporation uses the same office and the same office equipment previously used 

by respondent Holland Commodities Corporation and by the Holland Brodsky 

Company. The membership in the Chicago Mercantile Exchange of respondent Arnold 

B. Holland is owned by and held as an asset of the Holland Ovson Company, 

enabling the said corporation to enjoy membership trading privileges and 

clearing privileges on the said Exchange. On June 2, 1953, the Holland Ovson 

Company applied for and was registered as a futures commission merchant under 

the Commodity Exchange Act, and such registration is still in effect. 

VII 

At all times material to this complaint, the Chicago Mercantile Exchange was 

a duly designated contract market under the Commodity Exchange Act. 

VIII 

At the close of business on September 9, 1952, the books of the Holland 

Brodsky Company showed, as belonging to customers who were trading in commodity 

futures subject to the Commodity Exchange Act and regulations, (hereinafter 

called regulated commodity accounts), approximately $ 49,312, representing 

deposits of margin money and accruals from trades by such customers. At the 

same time, the said corporation had on deposit with a bank and with the Chicago 

Mercantile Exchange Clearing House approximately $ 54,181, properly segregated 

and identified as customers' funds, in accordance with the requirements of the 

Commodity Exchange Act and regulations, the difference of approximately $ 4,869 

representing a surplus or residual interest belonging to the Holland Brodsky 

Company. On September 10, 1952, respondent William B. Brodsky drew a check on 
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the customers' segregated funds bank account of the Holland Brodsky Company in 

the amount of $ 18,951, payable to the order of one Aaron B. Weiner, who was 

trading in a joint account with respondent Arnold B. Holland. Such joint 

account was not subject to segregation, and the said Aaron B. Weiner had no 

interest in and no right to any part of such segregated funds. The said check 

was paid in due course, and created a shortage of approximately $ 13,842 in 

segregated funds belonging to customers of the Holland Brodsky Company. 

IX 

The said $ 18,951 withdrawn from segregated funds of the Holland Brodsky 

Company on September 10, 1952, described in paragraph VIII, was 

not deducted from the bank balance shown on the books of the said corporation 

until November 28, 1952, with the result that, until the said date, the books of 

the Holland Brodsky Company showed that the firm had a continuous residual 

interest in segregated funds whereas, in truth and in fact, there was a 

continuous shortage in such funds. 

X 

At all times between September 10, 1952 and December 31, 1952, respondents 

Arnold B. Holland and William B. Brodsky operated the Holland Brodsky Company by 

using money belonging to customers, and at all times during this period the said 

corporation was in an under-segregated status -- that is, the balance of funds 

held in segregation was less than the amount necessary to pay all credits owing 

to customers entitled to payment out of such funds. At the close of business on 

September 30, 1952, the shortage in segregated funds was approximately $ 11,878, 

and on October 1, 1952, the said respondents made a further unauthorized 

withdrawal of $ 5,000, thereby increasing such shortage to approximately $ 

16,878. On December 31, 1952, the shortage was approximately $ 5,213. 

XI 

The under-segregated status of the Holland Brodsky Company continued after 

the name of the corporation was changed, and the Holland Commodities Corporation 

was under-segregated during the greater part of the period between January 1, 

1953, and April 30, 1953, and at all times between May 1, 

1953 and June 3, 1953, when it notified the Commodity Exchange Authority that it 

was ceasing to do business as a futures commission merchant, as above described. 

On May 19, 1953, when the shortage in segregated funds was approximately $ 793, 

the said corporation made an unauthorized withdrawal of $ 1,000 from such funds, 

thereby increasing the shortage to approximately $ 1,793. The Holland 

Commodities Corporation continued to carry customers' regulated commodity 

accounts after June 3, 1953, without having sufficient funds in segregation to 

pay sums owing to such customers. As of June 14, 1953, the deficit was 

approximately $ 1,545. 

XII 

At the close of business on May 21, 1953, the Holland Commodities Corporation 

had on its books a regulated commodity account controlled by the aforementioned 

Leo D. Ovson and Eugene P. Ovson, in which there were open trades and a credit 

balance of approximately $ 1,675. On May 22, 1953, the Holland Commodities 

Corporation transferred the said account and credit balance, together with all 

money held in segregation, to the Holland Ovson Company thereby depleting the 

entire fund segregated as belonging to customers of the Holland Commodities 

Corporation. The said transfer was effected by means of two letters to the 

Chicago Mercantile Exchange, one letter signed by respondent Arnold B. Holland 

as an officer of the Holland Commodities Corporation directing the exchange to 

make such transfer, and the other letter signed by respondent Arnold B. Holland 
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as an officer of the Holland Ovson Company accepting the said transfer on behalf 

of the 

Holland Ovson Company. At the time of such transfer, there were on the books of 

the Holland Commodities Corporation other regulated commodity accounts with no 

open trades and free credit balances aggregating approximately $ 1,545. Such 

accounts were left on the books of the Holland Commodities Corporation without 

any funds in segregation to satisfy such credit balances, and were in that 

statue as of June 14, 1953. 

XIII 

The unauthorized withdrawal and use of segregated funds by the Holland 

Brodsky Company, and the falsification of the records of the said corporation in 

order to conceal the shortage in segregated funds, as described in paragraphs 

VIII, IX, and X, took place under the direction and control of respondents 

Arnold B. Holland and William B. Brodsky, acting as officers of the Holland 

Brodsky Company. The organization of a new corporation of which respondent 

William B. Brodsky is practically the sole owner and beneficiary, and the use by 

such corporation of the Chicago Mercantile Exchange membership belonging to 

respondent William B. Brodsky, as described in paragraph IV, enables the said 

respondent to continue to operate as a futures commission merchant through such 

new corporation. The continuation of the under-segregated status of the Holland 

Brodsky Company after its registration as a futures commission merchant under 

the name of the Holland Commodities Corporation, and the further unauthorized 

withdrawals and use of segregated funds by the Holland Commodities Corporation, 

as described 

in paragraph XI, took place under the direction and control of respondent Arnold 

B. Holland in his capacity as President of the Holland Commodities Corporation. 

The organization of the Holland Ovson Company, the transfer to it of one of the 

accounts and all of the segregated funds of the Holland Commodities Corporation, 

and the ownership and use by it of the Chicago Mercantile Exchange membership 

belonging to respondent Arnold B. Holland, as described in paragraphs VI and 

XII, took place under the direction and control of respondent Arnold B. Holland 

as an individual and as a responsible officer of the Holland Commodities 

Corporation and the Holland Ovson Company. 

XIV 

By reason of the acts described above, the respondents, Arnold B. Holland, 

William B. Brodsky, William B. Brodsky and Company, Inc., the Holland 

Commodities Corporation, and the Holland Ovson Company, wilfully failed to treat 

and deal with all money received from customers to margin and secure their 

trades and all profits accruing to such customers as a result of such trades, as 

belonging to such customers, wilfully failed to account for such money 

separately, wilfully commingled such money with their own funds, wilfully used 

such money to secure and extend the credit of a customer other than those for 

whom such money was held, and wilfully failed accurately to reflect their 

interest in customers' segregated funds, in violation of section 4d(2) of the 

Commodity Exchange Act (7 U.S.C. 6d(2)) and sections 1.20-1.23, inclusive, of 

the rules and regulations thereunder (17 CFR 1.20-1.23). 

Therefore, the said respondents, Arnold B. Holland, William B. Brodsky, 

William B. Brodsky and Company, Inc., the Holland Commodities Corporation, and 

the Holland Ovson Company, are hereby notified to be and appear at a hearing to 

be held at 10 a.m., Central Daylight Saving time, on the 18th day of August, 

1953, in Room 1200, Board of Trade Building, 145 West Jackson Boulevard, 

Chicago, Illinois, before a referee designated to conduct such hearing, and then 

and there show cause, if any there by, why an order should not be made revoking 

or suspending the registrations as futures commission merchants of respondents 
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William B. Brodsky and Company, Inc., the Holland Commodities Corporation, and 

the Holland Ovson Company, revoking or suspending the registrations as floor 

brokers of respondents Arnold B. Holland and William B. Brodsky, and directing 

that all contract markets refuse all trading privileges to all the respondents 

for such period of time as may be determined by the Secretary of Agriculture. 

The respondents will have 20 days after the receipt of this notice of hearing 

in which to file with the Hearing Clerk, United States Department of 

Agriculture, Washington 25, D. C., in triplicate, an answer fully and completely 

stating the nature of the defense and admitting or denying specifically and in 

detail each material and relevant allegation of this complaint. Allegations 

that are not answered will be deemed admitted for the purpose of this 

proceeding. 

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

 

on the respondents by delivery of a true copy thereof by an employee of the 

Department of Agriculture, or by registered mail, at least 20 days prior to the 

date set for hearing. 

Done at Washington, D. C. 

this 20 day of July, 1953 

/s/ J. Earl Coke 

Acting Secretary of Agriculture 

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