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Commodity Futures Trading Commission 

CEA CASES 

NAME: HARNEY, BURNS INC., JOHN T. FONTANA, ROBERT O. INGAL, AND A. JAMES COMENZO 

CITATION: 26 Agric. Dec. 15 

DOCKET NUMBER: 127 

DATE: JANUARY 26, 1967 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 10,981) 

In re HARNEY, BURNS INC., JOHN T. FONTANA, ROBERT O. INGAL, AND A. JAMES 

COMENZO. CEA Docket No. 127. Decided January 26, 1967. 

Stipulation as to Harney, Burns Inc. and A. James Comenzo -- Undersegregation 

-- False statement in application-Denial of trading privileges

The corporate respondent and respondent A. James Comenzo consented to the 

issuance of an order directing all contract markets to refuse all trading 

privileges to them on the contract markets for five years for 

violations of the act in submitting a false financial statement in the 

corporation's application for registration, in undersegregation of customers' 

funds, the making of false records which purported to show that sufficient funds 

were held in segregated accounts and the failure to prepare records as of the 

close of the market each day of the amounts required to be in segregated 

accounts. As the corporation is not now registered under the act revocation of 

its registration as a futures commission merchant is not ordered herein. 

Mr. Earl L. Saunders for Commodity Exchange Authority. 

Mr. Henry W. Klemkowski, of Baltimore, Md., for respondents Harney, Burns 

Inc. and A. James Comenzo. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is an administrative proceeding under the Commodity Exchange Act (7 

U.S.C. 1 et seq.), instituted by a complaint and notice of hearing issued under 

section 6(b) of the act (7 U.S.C. 9) by the Acting Secretary of Agriculture. 

Respondents Harney, Burns Inc. and A. James Comenzo are two of four 

respondents in this proceeding. The complaint charges the said respondents with 

wilfully violating sections 4d, 4f and 4g of the Commodity Exchange Act (7 

U.S.C. 6d, 6f and 6g) and sections 1.10, 1.20, 1.21, 1.22, 1.23, and 1.32 of the 

regulations issued under the act (17 CFR 1.10, 1.20, 1.21, 1.22, 1.23, 1.32). 

At the time of the violations charged in the complaint, the respondent 

corporation was registered as a futures commission merchant under the Commodity 

Exchange Act. At the present time, it is not registered under the act. 

No hearing has been held with respect to any of the respondents. A consent 

order has been issued against respondent John T. Fontana, concluding the 

proceeding as against that respondent. On January 23, 1967, respondents Harney, 

Burns Inc. and A. James Comenzo submitted a stipulation under section 0.4(b) of 

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

set forth insofar as such facts concern the said respondents, waive hearing on 

the charges, and consent to the entry of an order (1) directing the denial of 
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all trading privileges to each of them on all contract markets for a period of 

five years and (2) revoking the registration of respondent Harney, Burns Inc. as 

futures commission merchant. 

FINDINGS OF FACT

1. Respondent Harney, Burns Inc., a New York corporation, was at all times 

material herein a registered futures commission merchant under the Commodity 

Exchange Act. 

2. Respondent A. James Comenzo, an individual, is now and was at all times 

material herein the Secretary-Treasurer of Harney, Burns Inc. 

3. On or about December 28, 1964, respondent Harney, Burns Inc., in 

connection with its application for registration as a futures commission 

merchant under the Commodity Exchange Act for the year 1965, knowingly submitted 

to the Commodity Exchange Authority a false financial statement, as of December 

22, 1964, attested to by respondent A. James Comenzo, which misrepresented and 

concealed the true financial condition of the respondent corporation. 

4. The acts and transactions hereinafter described were ordered and directed 

by or carried out by means of the acts of respondent A. James Comenzo and other 

officers of the respondent corporation in their capacities as officers of the 

respondent corporation. 

5. Respondent Harney, Burns Inc., in the normal course of its business as a 

futures commission merchant, carried accounts for customers who traded in 

commodity futures subject to the provisions of the Commodity Exchange Act. In 

connection therewith, the said respondent had to its credit with a bank or other 

depository sums of money in varying amounts, held in segregated account and 

identified as customers' funds, representing deposits of margins by and trading 

profits accruing to such customers. 

6. On December 29, 1964, and again on December 30, 1964, respondent Harney, 

Burns Inc. was undersegregated in an amount of approximately $ 4,000, that is, 

the total amount of customers' funds held in segregation, as described in 

Finding of Fact 5, was insufficient, by the aforesaid sum, to pay all credits 

and equities due to such customers. In connection therewith, respondent Harney, 

Burns Inc. prepared and maintained false records which purported to show that 

sufficient funds were held in segregated accounts to pay all credits and 

equities due its customers. 

7. On each business day during the period from March 5, 1965, through March 

31, 1965, respondent Harney, Burns Inc. was undersegregated in amounts ranging 

from approximately $ 15,000 on March 26, 1965, to approximately $ 27,000 on 

March 15, 1965, 

that is, the total amount of funds held in segregation, as described in Finding 

of Fact 5, was insufficient by such amounts to pay all credits and equities due 

to such customers. In connection therewith, respondent Harney, Burns Inc. 

prepared and maintained false records which purported to show that sufficient 

funds were held in segregated accounts to pay all credits and equities due its 

customers. 

8. On each business day during the period from April 1, 1965, through April 

8, 1965, respondent Harney, Burns Inc. was undersegregated in amounts ranging 

from approximately $ 6,000 on April 8, 1965, to approximately $ 13,000 on April 

1, 1965, that is, the total amount of funds held in segregation, as described in 

Finding of Fact 5, was insufficient by such amounts to pay all credits and 

equities due to such customers. During such period, respondent Harney, Burns 

Inc. failed to prepare and maintain a record as of the close of the market on 

each business day of the amount of money, securities and property required to be 

in segregated account in order to pay all credits and equities due to its 

customers. n1 
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n1. As indicated in the Preliminary Statement, this Decision and Order 

is with respect only to respondents Harney, Burns Inc. and A. James 

Comenzo, and the facts stated in the Findings of Fact are the admissions of 

fact contained in the stipulation filed by the said respondents. Such 

findings, however, have no binding effect on the remaining respondent, 

Robert O. Ingal. 

CONCLUSIONS

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

that, as charged in the complaint, respondents Harney, Burns Inc. and A. James 

Comenzo wilfully violated sections 4d, 4f and 4g of the Commodity Exchange Act 

(7 U.S.C. 6d, 6f, and 6g), and sections 1.10, 1.20, 1.21, 1.22, 1.23 and 1.32 of 

the regulations (17 CFR 1.10, 1.20, 1.21, 1.22, 1.23, 1.32). 

The complainant states that the administrative officials of the Commodity 

Exchange Authority have carefully considered the stipulation and waiver 

submitted by respondents Harney, Burns Inc. and A. James Comenzo. The 

administrative officials believe that if the decision makes it clear that the 

registration of the respondent corporation as futures commission merchant would 

be revoked if it were now so registered, the prompt entry of an order providing 

for the proposed denial of trading privileges would effectuate the purposes of 

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

stipulation and waiver be accepted and such a decision and order be issued. 

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

the respondent corporation were registered as a futures commission merchant 

under the Commodity Exchange Act at the present time, the order contained herein 

would include the revocation of such registration. 

ORDER

Effective on the thirtieth day after the date of entry of this order, all 

contract markets shall refuse all trading privileges to respondents Harney, 

Burns Inc. and A. James Comenzo for a period of five years, such refusal to 

apply to all trading done and positions held by said Harney, Burns Inc. and A. 

James Comenzo, or either of them, and also to all trading done and positions 

held indirectly through persons or firms owned or controlled by them, or either 

of them, or otherwise. 

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

on each contract market. 

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