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Commodity Futures Trading Commission 

CEA CASES 

NAME: MILLER-LANE AND COMPANY AND GEORGE C. LANE 

CITATION: 33 Agric. Dec. 1765 

DOCKET NUMBER: 225 

DATE: NOVEMBER 26, 1974 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 16,155) 

In re MILLER-LANE AND COMPANY and GEORGE C. LANE. CEA Docket No. 225. Decided 

November 26, 1974. 

Customers' funds -- failure to segregate -- False financial statements -- 

Reports and records -- failure to prepare and submit and to keep in accordance 

with regulations -- Failure to meet financial requirements -- Sanctions

Where the stipulation of respondents has been accepted, the order herein 

against them is issued for violations of the Act and regulations in connection 

with segregation of funds, false financial statements and reports and records as 

found herein. Both the corporate and the individual respondents are denied 

trading privileges for a period of six (6) months. Further, the corporate 

respondent's registration as a futures commission merchant under the Act is 

suspended for a period of six (6) months, and respondent George C. Lane's 

license as a floor broker under the Act is revoked. 

Michael D. Weiner, for complainant. 

James L. Fox, Chicago, Ill., for respondents. 

Decision by Harry S. McAlpin, Administrative Law Judge.

DECISION AND ORDER

PRELIMINARY STATEMENT

This is an administrative proceeding under the Commodity Exchange Act, "the 

Act" (7 U.S.C. § 1 et seq.), instituted by a Complaint and Notice of Hearing, 

alleging that the respondent Miller-Lane & Company is now, and was at all times 

material herein, a registered futures commission merchant under the Act and that 

respondent George C. Lane, is now, and was at all times material herein, 

president and sole stockholder of Miller-Lane & Company and registered as a 

floor broker under the Act. The complaint charges that the respondents failed 

to keep funds in segregated accounts sufficient to pay the equities due all 

regulated commodity customers on six specified dates, in violation of section 

4d(2) of the Commodity Exchange Act (7 U.S.C. 6d(2)) and section 1.20 of the 

regulations issued thereunder (17 CFR 1.20). The complaint further charges that 

the respondents failed to meet the minimum financial requirements of section 4f 

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

issued thereunder (17 CFR 1.17) on April 30, 1973 and July 31, 1973. The 

complaint further charges that the respondents made false statements in regard 

to the true financial position of the corporation on Commodity Exchange 

Authority Form 1-FR as of January 31, 1973 and July 31, 1973. The complaint 

further charges that the respondents violated sections 1.10 and 1.35 of the 

regulations issued under the Commodity Exchange Act (17 CFR 1.10 and 1.35) by 

failing to prepare and submit net worth computations and failing to keep "full, 
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complete and systematic records relating to the business of commodity futures 

trading." 

Prior to hearing the respondents agreed to a stipulation under section 0.4(b) 

of the Rules of Practice (17 CFR 0.4(b)) in which they (1) admit the facts 

hereunder as set forth in paragraphs 1 through 8 of the Findings of Fact, (2) 

waive oral hearing on the charges in the complaint, and (3) consent to the 

entry, without further proceedings, of a Decision and Order' containing the 

facts admitted in such stipulation as the Findings of Fact for the purposes of 

this proceeding only, conclusions of law based on such findings, and the Order 

contained herein. 

FINDINGS OF FACT

1. Respondent Miller-Lane & Company, an Illinois corporation with its 

principal office and place of business at 343 South Dearborn Street, Chicago, 

Illinois 60604, is now, and was at all times material herein, a registered 

futures commission merchant under the Commodity Exchange Act, engaged in trading 

commodities for future delivery. 

2. Respondent George C. Lane, an individual whose business address is the 

same as the corporate respondent, was at all times material herein, president 

and sole stockholder of Miller-Lane & Company and registered as a floor broker 

under the Commodity Exchange Act. At all such times, respondent Lane had 

responsibility for the operation and management of the corporate respondent. 

Subsequent to the issuance of the complaint in this proceeding, Hartford 

Commodities Corporation, an Illinois corporation, acquired all of the stock of 

respondent Miller-Lane & Company, with respondent Lane having no ownership 

interest in, and no management or control with respect to, Hartford Commodities 

Corporation. 

3. At all times material herein, the respondents Miller-Lane & Company and 

George C. Lane were required to separately account for and segregate all money, 

securities, and property received to margin, guarantee, or secure the trades or 

contracts of commodity customers in accordance with the requirements of section 

4d(2) of 

the Commodity Exchange Act (7 U.S.C. 6d(2)) and section 1.20 of the regulations 

issued thereunder (17 CFR 1.20). 

4. The segregation records of the respondent Miller-Lane & Company disclose 

that respondent Miller-Lane & Company failed to keep funds in segregated 

accounts sufficient to pay the equities due all regulated commodity customers as 

of the respective dates as follows: 

Date Amount of Undersegregation

August 22, 1973 138,330.25

August 23, 1973 173,801.27

August 24, 1973 200,889.10

August 27, 1973 84,459.88

August 21, 1973 59,939.01

August 29, 1973 69,980.83

5. On April 30, 1973, and July 31, 1973, the respondent corporation was 

engaged in business as a registered futures commission merchant under the 

Commodity Exchange Act, notwithstanding that on both dates it failed to meet the 

minimum financial requirements under section 4f of the Commodity Exchange Act (7 

U.S.C. 6f) and section 1.17 of the regulations issued thereunder (17 CFR 1.17). 

As of April 30, 1973, the respondent lacked approximately $ 86,000.00 of having 

sufficient capital to meet such minimum financial requirements under the Act, 

and on July 31, 1973, it lacked approximately $ 77,000 of having sufficient 

capital to meet the minimum financial requirements. 

6. On June 21, 1973, the respondent corporation submitted to the Commodity 

Exchange Authority a financial report (Form 1-FR) as of January 31, 1973, 

certified by the respondent George C. Lane to reflect the true financial 
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position of the corporation. The said respondents made material false 

statements in such report by overstating the amount of adjusted excess working 

capital by approximately $ 44,000. On October 31, 1973, respondent corporation 

submitted to the Commodity Exchange Authority a financial report (Form 1-FR) as 

of July 31, 1973, certified by the respondent George C. Lane to reflect the true 

financial postiion of the corporation. The said respondents made material false 

statements in such report by stating that the corporation had an excess of 

adjusted working capital when in fact it failed to meet minimum financial 

requirements under the Commodity Exchange Act by approximately $ 77,000. 

7. Under section 1.10 of the regulations issued pursuant to the 

Commodity Exchange Act (17 CFR 1.10), the respondent corporation was obligated 

at all times material herein to prepare a written computation of its net worth 

at least once each month. Further, whenever such computation showed, or the 

respondent knew or had reason to believe, that its net worth declined 20 % or 

more from its net worth as shown in the previous report of its financial 

condition, the respondent corporation was obligated to immediately notify the 

Commodity Exchange Authority. The dates of examination of records of respondent 

corporation and the months the respondent corporation failed to prepare the net 

worth computations are as follows: 

Date of Examination Months Net Worth 

Computation Not Prepared 

May 22, 1973 March and April, 1973 

June 7, 1973 April, 1973 

July 9, 1973 May, 1973 

August 28, 1973 July, 1973 

November 5, 1973 August and September, 1973 

December 11, 1973 August, September, and October, 1973 

January 10, 1974 October and November, 1973 

The months respondent corporation failed to notify the Commodity Exchange 

Authority of the reduction in net worth of 20 % or more from the January 31, 

1973 financial statement and the percentage decreases are as follows: 

Month Approximate Percentage Decrease

February, 1973 23 %

March, 1973 34 %

April, 1973 43 %

May, 1973 55 %

June, 1973 62 %

8. Section 1.35 of the regulations promulgated under the Commodity Exchange 

Act (17 CFR 1.35) obligated respondent corporation to keep "full, complete and 

systematic records . . . relating to his business of dealing in commodity 

futures . . . . Included among such records shall be all . . . ledgers." As of 

April 17, 1973, the respondent corporation had failed to post its general ledger 

for December 1972 through March 1973. As of August 27, 1973, the general ledger 

had not been posted for July 1973. As of December 11, 1973, the general ledger 

had not been posted for August through November 1973. As of January 10, 1974 

the general ledger had not been posted for November or December 1973. 

CONCLUSIONS

By reason of the facts set forth above, Miller-Lane & Company and George C. 

Lane have violated sections 4d, 4f, 4g, and 6(b) of the Commodity Exchange Act 

(7 U.S.C. 6d, 6f, 6g and 9) and sections 1.10, 1.17, 1.20, and 1.35 of the 

regulations promulgated under the Act (17 CFR 1.10, 1.17, 1.20, and 1.35) by 

failing to meet the minimum financial requirements of the Act, by making 

material false statements concerning the true financial position of the 

corporation, by failing to prepare and submit net worth computations and failing 

to keep "full, complete and systematic records" relating to the business of 

commodity futures, and by failing to segregate funds sufficient to pay the 

equities due all regulated commodity customers on six specified dates. It is 
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concluded that the Order consented to by the respondents is warranted under 

section 6(b) of the Act (7 U.S.C. 9) and 5 U.S.C. 558. 

The complainant states that Administrative Officials of the Commodity 

Exchange Authority have carefully considered the stipulation submitted by the 

respondents. The Administrative Officials believe that the prompt entry of the 

proposed Order would constitute a satisfactory disposition of this case, serve 

the public interest, and effectuate the purposes of the Act. The complainant 

recommends, therefore, that the stipulation be accepted and the proposed Order 

be issued. 

ORDER

1. Effective upon the date of service of this Order upon the respondents 

Miller-Lane & Company and George C. Lane, respondents shall cease and desist 

from (1) engaging in business as a futures commission merchant within the 

meaning of the Commodity Exchange Act without meeting the financial requirements 

prescribed by section 4f of the Commodity Exchange Act (17 U.S.C. 6f) and 

section 1.17 of the regulations issued thereunder (17 CFR 1.17), and (2) failing 

to keep funds in segregated accounts sufficient to pay the equities due all 

regulated commodity customers, and (3) submitting to the Commodity Exchange 

Authority financial reports which fail to reflect the true financial position of 

the corporation, and (4) failing to prepare a written computation of its net 

worth at least once each month, and (5) failing to notify the Commodity Exchange 

Authority whenever such computation shows, or the respondents 

know or have reason to believe, that the corporate respondent's net worth has 

declined 20 % or more from its net worth as shown in the previous report of its 

financial condition, and (6) failing to keep "full, complete, and systematic 

records" as required by section 1.35 of the regulations promulgated under the 

Commodity Exchange Act (17 CFR 1.35). 

2. Effective on the thirtieth day after the date of entry of this Order, 

(a) The registration of respondent George C. Lane as floor broker is hereby 

revoked, and 

(b) Respondent George C. Lane is prohibited from trading on or subject to the 

rules of any contract market for a period of six months, and all contract 

markets shall refuse all trading privileges to the respondent during this 

period, such prohibition and refusal to apply to all trading done and positions 

held by respondent directly or indirectly. 

3. Effective on the thirtieth day after the date of entry of this Order, 

(a) The registration of respondent Miller-Lane & Company as futures 

commission merchant under the Commodity Exchange Act is hereby suspended for a 

period of six months, and 

(b) Respondent Miller-Lane & Company is prohibited from trading on or subject 

to the rules of any contract market for a period of six months, and all contract 

markets shall refuse all trading privileges to the respondent during this 

period, such prohibition and refusal to apply to all trading done and all 

positions held by respondent Miller-Lane & Company directly or indirectly. 

4. The prohibition from trading and suspension of registration set forth in 

paragraph 3 above shall not become effective unless respondent Miller-Lane & 

Company shall have violated the Commodity Exchange Act or the regulations issued 

thereunder within three years from the date of issuance of this Order by reason 

of facts other than those constituting the basis for charges brought in this 

proceeding. In the event such subsequent violation should be found to have 

occurred, after complaint and hearing in accordance with established procedure, 

a supplemental Order may be issued in this proceeding, without further notice, 

making effective the prohibition and suspension set forth in paragraph 3 above. 

Such Order shall be in addition to any 
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sanction which may be imposed as a result of such subsequent violation. 

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

and on each contract market. 

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