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Commodity Futures Trading Commission 

CEA CASES 

NAME: MYERS AND COMPANY, AND A. H. MYERS 

DOCKET NUMBER: 155 

DATE: JULY 3, 1968 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Myers and Company, and A. H. Myers, Respondents 

CEA Docket No. 155 

Complaint and Notice of Hearing Under Section 6(b) of the Commodity Exchange 

Act 

There is reason to believe that the respondents, Myers and Company and A. H. 

Myers, have violated the Commodity Exchange Act (7 U.S.C. 1 et seq.), and the 

regulations made pursuant thereto (17 CFR, Part I), and in accordance with the 

provisions of section 6(b) of the said act (7 U.S.C. 9), this complaint and 

notice of hearing is issued stating the charges in that respect as follows: 

I 

Respondent Myers and Company, a Missouri corporation with offices at 4800 

Main Street, Kansas City, Missouri, is now, and was at all times material to 

this complaint, a registered futures commission merchant under the Commodity 

Exchange Act and so engaged in business. 

II 

Respondent A. H. Myers, an individual whose business address is the same as 

that of the respondent corporation, is now, and was at all times material to 

this complaint, the president and a principal shareholder of the respondent 

corporation and a registered floor broker under the Commodity Exchange Act. At 

all such times, respondent 

A. H. Myers managed and controlled the business of the respondent corporation 

and was responsible for the corporate acts and transactions hereinafter 

described. 

III 

a. At the times hereinafter stated, respondent Myers and Company, in the 

regular course of its business as futures commission merchant, carried accounts 

of customers who traded in commodity futures on contract markets subject to the 

provisions of the Commodity Exchange Act and regulations. Such accounts, the 

trading therein, and the handling and disposition of funds in connection 

therewith, were subject to the provisions of the said act and regulations. At 

all such times, the respondent corporation had to its credit with banks or other 

depositories sums of money in varying amounts, held in segregated accounts and 

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

profits accruing to such customers. 

b. On 88 business days during the period between September 1, 1966, and 

January 31, 1967, both inclusive, the respondent corporation was undersegregated in amounts ranging from $ 246.61 on September 13, 1966, to $ 

27,935.01 on October 24, 1966, that is, on the 88 days mentioned the total 
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amount of customers' funds held in segregation as above described, was from $ 

246.61 to $ 27,935.01 less than the amount necessary to pay all credits and 

equities due to such customers. 

c. Under the regulations issued pursuant to the Commodity Exchange Act the 

respondent corporation was obligated during the period specified above to 

prepare and maintain a daily computation and record 

setting forth the amount of money, securities and property of its customers 

required to be held, and held, in segregated accounts in accordance with the 

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

On the daily computation and record that was prepared and kept by the respondent 

corporation to meet the requirements of the regulations, during the period 

specified above, the respondent corporation showed that it had excess funds in 

segregation in amounts ranging from $ 222.89 to $ 144,129.88, whereas, in truth 

and in fact, the said corporation was under-segregated as specified above. 

IV 

a. On September 3, 1954, a complaint was filed pursuant to section 6(b) of 

the Commodity Exchange Act, naming as respondents the respondents in the instant 

proceeding and two other individuals, who were officers of the respondent 

corporation. The said complaint filed on September 3, 1954, alleged, inter 

alia, that respondent Myers and Company was under-segregated on various 

occasions within a period of approximately thirteen consecutive months in 1953 

and 1954 -- that is, that the total amount of customers' funds held in 

segregated accounts of the corporation with depositories was less than the sum 

necessary to pay all credits owing to such customers; that the corporation 

wrongfully withdrew funds from such accounts resulting in under-segregation; 

that it failed to compute and its books failed to show the amount of money, 

securities and property required to be held in segregation under the Commodity 

Exchange Act and the regulations thereunder; that 

such acts and omissions took place under the supervision and direction of the 

individual respondents; and that by reason thereof the respondents violated 

section 4d(2) of the Commodity Exchange Act and sections 1.20 and 1.27, 

inclusive, of the regulations thereunder (17 CFR 1.20-1.27). Such proceeding 

was terminated by the entry of a consent order on February 1, 1955, imposing 

sanctions against respondents Myers and Company and A. H. Myers. 

b. Subsequent to the entry of the order in the above-mentioned proceeding and 

prior to the acts and omissions described in paragraph III above, the Commodity 

Exchange Authority examined the records of the respondent corporation as of June 

28, 1957, December 30, 1960, and April 30, 1962, and on each such occasion 

notified respondent A. H. Myers that the examination had disclosed that the 

respondent corporation was in an under-segregated condition and discussed the 

matter with him. 

V 

By reason of the facts described in this complaint, the respondents willfully 

violated sections 4d(2) and 4g of the Commodity Exchange Act (7 U.S.C. 6d(2), 

6g), and sections 1.20, 1.1, 1.22, 1.23, 1.32 and 1.35 of the regulations 

thereunder (17 CFR 1.20, 1.21, 1.22, 1.23, 1.32, 1.35). 

WHEREFORE, it is hereby ordered that this complaint and notice of hearing be 

served upon the respondents. The respondents will have twenty (20) days after 

the receipt of this complaint in which to file with the Hearing Clerk, United 

States Department of Agriculture, 
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Washington, D. C. 20250, an answer with an original and four copies, fully and 

completely stating the nature of the defense and admitting or denying, 

specifically and in detail, each allegation of this complaint. Allegations not 

answered will be deemed admitted for the purposes of this proceeding. Failure 

to file an answer will constitute an admission of all the allegations of this 

complaint and a waiver of hearing. The filing of an answer in which all of the 

material allegations of fact contained in the complaint are admitted likewise 

shall constitute a waiver of hearing unless a hearing is requested. The 

respondents are hereby notified that unless hearing is waived, a hearing will be 

held at 10:00 a.m., local time, on July 30, 1968, in Kansas City, Missouri, at a 

place therein to be specified later, before a referee designated to conduct such 

hearing. At such hearing, the respondents will have the right to appear and 

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

revoking the registration of respondent Myers and Company as futures commission 

merchant, suspending or revoking the registration of respondent A. H. Myers as 

floor broker, and directing that all contract markets refuse all trading 

privileges to the respondents for such period of time as may be determined. 

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

respondents at least twenty (20) days prior to the date set for hearing. 

Done at Washington, D. C. 

July [ILLEGIBLE TEXT], 1968 

[SEE SIGNATURE IN ORIGINAL] 

John A. Schnittker 

Acting Secretary 

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