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Commodity Futures Trading Commission 

CEA CASES 

NAME: GENERAL COMMERCE CORPORATION 

CITATION: 16 Agric. Dec. 495 

DOCKET NUMBER: 76 

DATE: JUNE 19, 1957 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 5056) 

In re GENERAL COMMERCE CORPORATION. CEA Docket No. 76. Decided June 19, 1957. 

Violation of Reporting Provisions -- Default -- Denial of Trading Privileges

The complaint charges violation of the reporting provisions of the act and 

the regulations issued thereunder. Respondent, by failing to answer the 

complaint, admitted the violations alleged in the complaint. All contract 

markets are ordered to refuse all trading privileges to respondent for a period 

of 60 days. 

Mr. Benj. M. Holstein, for Commodity Exchange Authority. Mr. Will Rogers,

Referee. 

Decision by Thomas J. Flavin, Judicial Officer 

PRELIMINARY STATEMENT

This is a disciplinary proceeding under the Commodity Exchange Act (7 U.S.C. 

Chapter 1), instituted by a complaint issued under section 6(b) of the act on 

March 13, 1957, by the Assistant Secretary of Agriculture. Respondent is 

charged with knowingly and wilfully violating the reporting provisions of the 

act and the rules and regulations issued thereunder. A copy of the complaint 

and a copy of the rules of practice were served on respondent March 16, 1957. 

At the time of service of the complaint respondent was notified, in effect, 

that an answer thereto should be filed within 20 days after such service and 

that, in accordance with section 0.9 of the rules of practice (17 CFR 0.9), 

failure to file an answer would constitute an admission of the facts in the 

complaint and a waiver of oral hearing. Notwithstanding such notice, respondent 

has not filed an answer. The matter was referred to Will Rogers, Hearing 

Examiner, Office of Hearing Examiners, United States Department of Agriculture, 

for the preparation of a report without further investigation or hearing 

pursuant to section 0.9(c) of the rules of practice (17 CFR 0.9(c)). The 

examiner filed a report on May 22, 1957, recommending that respondent be denied 

all trading privileges on all contract markets for a period of 60 days. No 

exceptions were filed to the examiner's report. 

FINDINGS OF FACT

1. Respondent, General Commerce Corporation, was at all times material herein 

a corporation with an office and place of business at 571 Central Avenue, 

Newark, New Jersey. 

2. The Board of Trade of the City of Chicago, hereinafter referred to as the 

Chicago Board of Trade, was at all times material herein a duly designated 

contract market under the act. 

3. On each day during the periods October 25 through December 11, 1956, 

December 17 through December 19, 1956, and January 17 through January 2, 1957, 
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the net long or net short open contract position of the respondent corporation 

in lard futures on the Chicago Board of Trade ranged from 1,040,000 to 1,640,000 

pounds in a single future. Respondent was in reporting status during such 

periods and was required to report 

to the Commodity Exchange Authority with respect to all transactions executed 

and all open contract positions held for its account in all lard futures on all 

boards of trade (exchanges) during the said periods, and with respect to all 

transactions by reason of which respondent's position was reduced below 

reporting levels. 

4. On seven business days within the periods specified in Finding of Fact 3, 

while the respondent corporation was in reporting status as therein described, 

and on three additional business days immediately thereafter when its position 

was reduced below reporting levels, transactions in lard futures on the Chicago 

Board of Trade were executed for its account, but respondent failed and refused 

to report to the Commodity Exchange Authority with respect to such transactions. 

5. Between September 14, 1956, and December 11, 1956, the Commodity Exchange 

Authority communicated with respondent nine times because of its failure to 

transmit reports. The Administrator, Commodity Exchange Authority, by letter 

dated December 11, 1956, to the respondent corporation called attention to its 

delinquencies in submitting reports, informed it that such delinquencies were a 

continuing violation of the act and warned it that continued failure in this 

regard could result in the institution of administrative proceedings directed 

toward the denial to respondent of trading privileges on contract markets. 

CONCLUSIONS

Section 4i of the Commodity Exchange Act (7 U.S.C. 6i) provides as follows: 

"It shall be unlawful for any person to make any contract for the purchase or 

sale of any commodity for future delivery on or subject to the rules of any 

contract market unless such person shall report or cause to be reported to the 

properly designated officer in accordance with the rules and regulations of the 

Secretary of Agriculture . . . (2) whenever such person shall directly or 

indirectly have or obtain a long or short position in any commodity or in any 

future of such commodity, equal to or in excess of such amount as shall be fixed 

from time to time by the Secretary of Agriculture . . . ." 

During the periods in question, the quantity of lard futures fixed by the 

Secretary for reporting purposes pursuant to section 4i was 600,000 pounds prior 

to November 24, 1956, and 1,000,000 pounds thereafter (17 CFR, 1957 Supp. 9.21; 

14 F.R. 2521, 21 F.R. 9165). 

Respondent failed and refused to file required reports on 10 occasions within 

a period of approximately three months. Such failure constitutes a violation of 

section 4i of the act and sections 9.10, 9.11 and 9.12 of the rules and 

regulations issued thereunder (17 CFR 9.10, 9.11 and 9.12). The number of 

instances involved and the fact that the respondent received ample notice of its 

delinquency prior to the institution of this proceeding justify the conclusion 

that the violations were deliberate and wilful. Accordingly, all contract 

markets should be directed to refuse all trading privileges to the respondent 

corporation for a period of 60 days as recommended by complainant, such refusal 

to apply to all trading done and positions held by the respondent directly or 

indirectly. 

ORDER

Effective July 22, 1957, all contract markets shall refuse all trading 

privileges to respondent for a period of 60 days, such refusal to apply to all 

trading done and positions held by respondent directly or indirectly. 

A copy of this decision and order shall be served on respondent and on each 

contract market. 
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