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Commodity Futures Trading Commission 

CEA CASES 

NAME: SECRETARY OF AGRICULTURE V. W. G. EDWARDS 

DOCKET NUMBER: 18 

DATE: MARCH 22, 1940 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

CEA DOCKET NO. 18 

Secretary of Agriculture, Complaint, v. W. G. Edwards, Respondent. 

Complaint and Notice of Hearing Under the Commodity Exchange Act. 

There being reason to believe that the respondent hereinafter named has 

violated the Commodity Exchange Act (7 U.S.C., 1934 ed., and Supp. IV, 

[ILLEGIBLE TEXT] 1-17a), and the rules and regulations promulgated pursuant 

thereto, this complaint is issued alleging the following: 

1. 

W. G. Edwards is and individual formerly trading and doing business under the 

firm name and style of W. G. Edwards & Co. at Billings, Montana, and Rapid City, 

South Dakota and was registered with the Secretary of Agriculture as a futures 

commission merchant for the calendar years 1938 and 1939. 

2. 

From January 1938 to June 24, 1939, the respondent, acting by and through the 

means of W. G. Edwards & Co., a sole proprietorship owned by the respondent, 

engaged as a futures commission merchant in soliciting orders for the purchase 

and sales of commodities for future delivery involving contracts of sales of 

such commodities for future delivery on or subject to the rules of the Board of 

Trade of the City of Chicago and the Minneapolis Chamber of Commerce, contract 

markets designated by the Secretary of Agriculture pursuant to the provisions of 

the Commodity Exchange Act, and while so engaged failed to keep proper records 

of commodity futures transactions as required by Section 4(g) of the Commodity 

Exchange Act, and sections 32, 33 and 34 of the rules and regulations 

promulgated pursuant thereto. 

3. 

The respondent was between August 9, 1938 and June 25, 1939, a correspondent 

of Farrel Brothers and Moore, McLean & McDermott, member firms of a contract 

market, and the respondent was a member of the Chicago Mercantile Exchange, a 

contract market, and during this period, in connection with orders to make and 

the making of futures contracts for the commodities named in the Commodity 

Exchange Act on contract markets, which contracts may be used for hedging or 

determining the price basis of transaction in interstate commerce in the 

commodities involved, attempted to and did chest and 

defraud persons for whom such contracts were made, wilfully made and caused to 

be made misleading and false reports and statements concerning such contracts to 

such persons, and wilfully attempted to and did deceive such persons is regard 

to such contracts and acts of agency performed with respect to such contracts by 

reporting to such persons the execution of such contracts by or through a member 
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of the Board of Trade of the City of Chicago and the Minneapolis Chamber of 

Commerce, when in fact such contracts were act to executed, and falsely 

reporting the prices at which orders were executed, all in violation of the 

Commodity Exchange Act and the rules and regulations promulgated pursuant 

thereto. 

4. 

The respondent, while a member of a contract market and a correspondent of 

member firms of a contract market, in connection with orders to make and the 

making of futures contracts for commodities named in the Commodity Exchange Act 

on contract markets, which contracts may be used for hedging or determining the 

price basis of transactions in interstate commerce in commodities involved, on 

August 9, 1938 and various dates thereafter, including August 18, 19, and 25, 

1938, September 15, 1938, December 1, 1938, May 31, 1938, June 21, 22, and 24, 

1939, bucketed such orders by confirming the execution thereof to various 

customers, including Cecil Waters, Harold B[ILLEGIBLE TEXT], Althea Te[ILLEGIBLE 

TEXT], Dr. M M Sherman and 

Frederic A. Witcher, when, in fact, the orders were not executed on a contract 

market but were held by the respondent for his own account, all in violation of 

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

5. 

The respondent, between August 8, 1938 and June 24, 1939, conducted an office 

or place of business at Billings, Montana, and Rapid City, South Dakota, for the 

purpose of soliciting or accepting orders for the purchase or sale of 

commodities for future delivery, and conducting dealings in commodities for 

future delivery that could he used for hedging or determining the price basis 

for such transaction in interstate commerce, and executed or consummated such 

orders, contracts or dealings otherwise than by or through a member of a 

contract market, in violation of Section 4(b), subsection I of the Commodity 

Exchange Act. 

6. 

The respondent, during the times hereinbefore mentioned, delivered for 

transmission through the mails or in interstate commerce by other means of 

communication, confirmations of the execution of and reports of the price of 

contracts of sale of commodities for future delivery on or subject to the rules 

of the Board of Trade of the City of Chicago and the Minneapolis Chamber of 

Commerce, 

when such contracts were not made by or through a member of a board of trade 

which had been designated by the Secretary of Agriculture as a contract market, 

all in violation of Section 4 of the Commodity Exchange Act. 

7. 

The respondent, during the period from January 1938 to June 24, 1939, by and 

through the means of W. G. Edwards & Co., engaged as a futures commission 

merchant, and while so engaged received funds from customers to margin their 

trades in commodity futures contracts and funds accruing to their account, as a 

result of trades in commodity futures contracts, on contract markets, and failed 

to segregate the funds as received, and, in fact, commingled such funds with 

respondent's own funds and the funds of security customers. 

THEREFORE, the respondent is hereby notified to be and appear before a 

referee to be appointed by the Secretary of Agriculture at a hearing to be held 

at 10:00 a.m. on April 5, 1940, in Room 1831, South Building, Department of 

Agriculture, Washington, D. C., or at such other times and places as may be 

determined by the referee, and then and there show cause, if any there be, why 
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an order shall not be made revoking the registration of the respondent as a 

futures commission merchant, and directing that all contract markets, until 

further notice of the Secretary of 

Agriculture, refuse all trading privileges to the respondent. 

IT IS ORDERED that this complaint and notice of hearing be served on the 

named respondent, by delivery of a true copy hereof to him by an employee of the 

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

the date herein set for hearing. 

Done at Washington, D. C., this 22nd day of March 1940. Witness my hand and 

the seal of the Department of Agriculture. 

[SEE SIGNATURE IN ORIGINAL] 

Assistant Secretary of Agriculture. 

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