Page 1 

Commodity Futures Trading Commission 

CEA CASES 

NAME: GARNAC GRAIN COMPANY, INC., FRED HEDIGER, JEAN JACQUES PASCHE, H. R. 

SCHMID, GEORGE LULIE, AND ERWIN MINDER 

DOCKET NUMBER: 45 

DATE: MARCH 24, 1948 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re Garnac Grain Company, Inc., Fred Hediger, Jean Jacques Pasche, H. R. 

Schmid, George Lulie, and Erwin Minder, Respondents 

CE-A Docket No. 45 

Complaint and notice of hearing under Section 6(b) of the Commodity Exchange 

Act 

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

Garnac Grain Company, Inc., Fred Hediger, Jean Jacques Pasche, H. R. Schmid, 

George Lulie, and Erwin Minder have violated the provisions of the Commodity 

Exchange Act (7 U.S.C. 1-17a), and the rules and regulations promulgated 

thereunder. In accordance with the provisions of Section 6(b) of the said Act, 

this complaint is issued alleging as follows: 

1. 

Respondent Garnac Grain Company, Inc. is a corporation organized under the 

laws of the State of New York, with its principal place of business at No. 2, 

Broadway, New York, New York. The said respondent enjoys membership trading 

privileges on the Board of Trade of the City of Chicago. During the calendar 

year 1942, the said respondent was registered as a futures commission merchant 

under the provisions of the Commodity Exchange Act. In accordance with the 

requirements of Section 4f(1) of the said Act, such registration expired on 

December 31, 1942, and during the period from January 1, 1943, to February 17, 

1948, 

which includes all times material to this complaint, the said respondent did not 

apply for registration and was not registered as a futures commission merchant 

under the provisions of the said Act. On February 17, 1948, the said respondent 

again applied for registration, was again registered as a futures commission 

merchant under the provisions of the Commodity Exchange Act, and is now so 

registered. 

2. 

The Board of Trade of the City of Chicago, hereinafter called the Chicago 

Board of Trade, was, prior to the time of the transactions mentioned in this 

complaint, duly designated as a contract market under the provisions of the 

Commodity Exchange Act, and has been a contract market continuously since that 

time. 

3. 

Fred Hediger, an individual residing at No. 10, Montague Terrace, Brooklyn, 

New York, was at all times material to this complaint and is now President of 

respondent Garnac Grain Company, Inc., and a member of the Chicago Board of 

Trade. 
Page 2 

4. 

Jean Jacques Pasche, an individual residing at 68 Montague street, Brooklyn, 

New York, was at all times material to this complaint and is now Vice President 

of respondent Garnac Grain Company, Inc. 

5. 

H. R. Schmid, an individual residing at 225 Cumberland Street, Brooklyn, New 

York, was at all times material to this complaint and is now Treasurer of 

respondent Garnac Grain Company, Inc. 

6. 

George Lulie, an individual residing at 147-30 15th Drive, Whitestone, Long 

Island, was at all times material to this complaint and is now secretary of 

respondent Garnac Grain Company, Inc. 

7. 

Erwin Minder, an individual residing at 469 Washington Avenue, Brooklyn, New 

York, was at all times material to this complaint and is now an officer of and 

attorney for respondent Garnac Grain Company, Inc. 

8. 

Andre et Cie, Societe Anonyme, a foreign corporation located at Lausanne, 

Switzerland, Evera, S.A.C., a foreign corporation located at Montevideo, 

Uruguay, and the Range Grain Company, Ltd., a foreign corporation located at 

Winnepeg, Canada, were, at all times material to this complaint, customers of 

respondent Garnac Grain Company, Inc. 

9. 

On or about May 23, 1947, respondent Garnac Grain Company, Inc. sold 35,000 

bushels of July 1947 corn futures contracts on the Chicago Board of Trade for 

the account of the said Andre et Cie, but made entries in its books showing the 

sale on that date of 60,000 bushels of July 1947 corn futures contracts for the 

account of the said Andre et Cie, and reported such sale to the said Andre et 

Cie. On or about September 8, 1947, the said respondent confirmed to the said 

Andre et Cie that 60,000 bushels of July 1947 corn futures contracts had been 

sold on the Chicago Board of Trade on 

May 23, 1947, and rendered an account to the said Andre et Cie based upon such 

sale. The said entries, confirmation, and account included 25,000 bushels of 

July 1947 corn futures contracts shown as sold on May 23, 1947, at the price of 

$ 1.67 3/4 per bushel whereas, in truth and in fact, no such sale had been made. 

The said transaction, to the extent of 25,000 bushels of July 1947 corn futures 

contracts, constituted the bucketing of an order in violation of Section 4b(D) 

of the Commodity Exchange Act. 

10. 

On or about July 23, 1947, respondent Garnac Grain Company, Inc. made entries 

in its books showing the sale on that date of 90,000 bushels of September 1947 

corn futures contracts on the Chicago Board of Trade at $ 2.09 3/4 per bushel 

for the account of said Andre et Cie, and reported such sale to the said Andre 

et Cie. On or about September 8, 1947, the said respondent confirmed to the 

said Andre et Cie that 90,000 bushels of September 1947 corn futures contracts 

had been sold on the Chicago Board of Trade on July 23, 1947, at $ 2.09 3/4 per 

bushel, and rendered an account to the said Andre et Cie based upon such sale 

whereas, in truth and in fact, no such sale had been made. The said transaction 

constituted the bucketing of an order in violation of Section 4b(d) of the 

Commodity Exchange Act. 

11. 
Page 3 

On or about October 29, 1947, respondent Garnac Grain Company, Inc. received 

an order from the said Andre et Cie to sell 5,000 bushels of December 1947 wheat 

futures contracts on the Chicago Board of Trade 

at $ 2.95 per bushel for the account of said Andre et Cie. On or about October 

31, 1947, the said respondent confirmed to the said Andre et Cie the sale of 

5,000 bushels of December 1947 wheat futures contracts on the Chicago Board of 

Trade at $ 2.85 per bushel, and rendered an account to the said Andre et Cie 

based upon such sale whereas, in truth and in fact, no such sale had been made, 

the said respondent having taken the opposite side of the said transaction into 

its own account. The said transaction constituted the bucketing of an order in 

violation of Section 4b(D) of the Commodity Exchange Act. 

12. 

The transactions in corn futures and wheat futures described in paragraphs 9, 

10, and 11, above, were capable of being used for hedging a transaction in 

interstate commerce in corn or wheat, respectively, or the products or byproducts thereof, or for determining the price basis of a transaction in 

interstate commerce in corn or wheat, respectively, or for delivering corn or 

wheat sold, shipped or received in interstate commerce. 

13. 

By reason of the transactions described in paragraphs 9 and 10, above, the 

respondents defrauded the said Andre et Cie, wilfully made false reports to the 

said Andre at Cie, wilfully entered false records of such transactions, and 

wilfully deceived the said Andre et Cie with respect to the execution of such 

contracts, all in violation of Sections 4b(A), 4b(B) and 4b(C) of the Commodity 

Exchange Act. 

14. 

On or about March 26, June 3, July 23, August 3, September 21, and September 

24, 1946, March 8, 10, 14, 18, 21, 22, 24, 25, 26, 27, May 2, 8, 16, 22, 24, 27, 

28, June 2, 4, 5, 6, 10, 11, 18, 20, 23, 24, 25, 27, July 12, 16, 17, 18, 23, 

28, 29, 31, August 4, 5, 11, 12, 13, 15, September 20, 22, 27, and October 15, 

1947, respondent Garnac Grain Company, Inc., acting in the capacity of a futures 

commission merchant on behalf of Andre et Cie, transmitted orders to other 

brokers for the purchase or sale of commodities for future delivery on the 

Chicago Board of Trade, received confirmation from such brokers that such orders 

had been executed, reported such execution to the said Andre et Cie, and entered 

the said transactions in its books in the account of the said Andre et Cie. On 

the dates above set forth, the said respondent was not registered as a futures 

commission merchant as required by Section 4d of the Commodity Exchange Act. 

15. 

On or about July 17, August 5, 7, 11, September 4, October 10, 17, 23, 

November 3, 7, 13, 15, 17 and 18, 1947, respondent Garnac Grain Company, Inc., 

acting in the capacity of a futures commission merchant on behalf of Evera, 

S.A.C., transmitted orders to other brokers for the purchase or sale of 

commodities for future delivery on the Chicago Board of Trade, received 

confirmation from such brokers that such orders had been executed, reported such 

execution to the said Evera, S.A.C., and entered the resulting transactions in 

its books in 

the account of the said Ever, S.A.C. On the dates above set forth, the said 

respondent was not registered as a futures commission merchant as required by 

Section 4d of the Commodity Exchange Act. 

16. 
Page 4 

On or about August 14, 20 and 29, September 5, 8, 11 and 12, 1947, respondent 

Garnac Grain Company, Inc., acting in the capacity of a futures commission 

merchant on behalf of the Range Grain Company, Ltd., transmitted orders to other 

brokers for the purchase or sale of commodities for future delivery on the 

Chicago Board of Trade, received confirmation from such brokers that such orders 

had been executed, reported such execution to the said Range Grain Company, 

Ltd., and entered the resulting transactions in its books in the account of the 

said Range Grain Company, Ltd. On the dates above set forth, the said 

respondent was not registered as a futures commission merchant as required by 

Section 4d of the Commodity Exchange Act. 

17. 

On August 28 and 29, September 23, 24, October 1, 2, 4, 7, 10, 14, 20, 24, 

29, November 1, 4, 6, 7, 8, 12, 13, and 14, 1947, as a result of purchases or 

sales of corn or wheat for future delivery executed for its own account on the 

Chicago Board of Trade, the respondent Garnac Grain Company, Inc. had increased 

its long or short position in corn futures contracts or wheat futures contracts, 

respectively, from an amount less than 200,000 bushels to an amount in excess 

thereof, or, having a long 

or short position in corn futures contracts or wheat futures contracts in excess 

of 200,000 bushels, had increased or decreased such position. The said 

respondent thereupon failed to report such changes in position to the Commodity 

Exchange Authority, in violation of section 41 of the Commodity Exchange Act and 

Section 2.10 of the Rules and Regulations thereunder. 

18. 

At the time of the transactions described in paragraphs 9, 10, 11, 14, 15, 

16, and 17, above, respondents Fred Hediger, Jean Jacques Pasche, H. R. Schmid, 

George Lulie, and Erwin Minder were officers of the corporate respondent Garnac 

Grain Company, Inc., and the said transactions were consummated and carried out 

through and by means of the acts of the said respondents in their official 

capacity as officers of the said corporate respondent. 

Therefore, the said respondents, Garnac Grain Company, Inc., Fred Hediger, 

Jean Jacques Pasche, H. R. Schmid, George Lulie, and Erwin Minder are hereby 

notified to be and appear at a hearing to be held at 10:00 o'clock, a.m., 

e.s.t., on the 12th day of May, 1948, in Room 602, 60 Beaver Street, New York, 

New York, before a referee designated to conduct such hearing and there show 

cause, if any there be, why an order should not be made suspending or revoking 

the registration of the said Garnac Grain Company, Inc., as a futures commission 

merchant under the Commodity Exchange Act, and directing that all contract 

markets 

refuse all trading privileges to the said respondents for such period of time as 

the Secretary of Agriculture may determine. 

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

in which to file with the Secretary of Agriculture, 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 24 day of March, 1948. 
Page 5 

/s/ Clinton P. Anderson 

Secretary of Agriculture 

LOAD-DATE: June 16, 2008 
Page 6