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Commodity Futures Trading Commission 

CEA CASES 

NAME: REUBEN EARL MCGUIGAN 

CITATION: 5 Agric. Dec. 249 

DOCKET NUMBER: 37 

DATE: APRIL 11, 1946 

DOCUMENT TYPE: DECISION AND ORDER 

NOTE: CORRECTION TO DECISION AND ORDER IS REPORTED IN 5 AGRIC. DEC. 525 

AGRICULTURE DECISIONS

(A. D. 1191) 

In re REUBEN EARL McGUIGAN. CEA Doc. No. 37. Decided April 11, 1946. 

Consent Order -- Suspension of Trading Privileges -- Manipulating Price of 

Commodity Futures

By consent of the parties, respondent's trading privileges on contract 

markets are suspended until further notice for manipulating the price of grain 

and cotton futures. 

Mr. Benj. M. Holstein for complainant. Mr. Thomas S. Agresta, of Brooklyn, New 

York, for respondent. Mr. John J. Murray, 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 on January 3, 1946, by the 

Secretary of Agriculture. The respondent, Reuben Earl McGuigan, of New York, 

New York, who also used the names E. L. McGuigan. Louis J. Burnstein, and 

International Market Forecast Bureau, was charged with having manipulated the 

price of commodities for future delivery on contract markets during 1945. In 

the complaint a hearing was set for February 13, 1946, in New York City. On 

February 6, 1946, John J. Murray of the Washington office. Office of the 

Solicitor, who had been assigned as referee by an Associate Solicitor on January 

22, 1946, set the hearing for February 26. On February 15 respondent filed his 

consent to the issuance of an order based upon the allegations of the complaint, 

and on March 12 the Production and Marketing Administration, the complainant, 

recommended a consent order denying respondent all trading privileges on 

contract markets until further notice. Apparently the scheduled hearing was not 

held, and on April 3, 1946, the record was referred to this office under section 

0.4(b) of the rules of practice (17 CFR. Cum. Supp., Part O, as amended by 10 F. 

R. 2647, 5068, 10964), which provides for a consent order before a hearing is 

held. On the basis of the complaint and the consent and recommendation, this 

order, prepared in this office, is issued. 

FINDINGS OF FACT

1. During 1945 respondent, an individual using the names Reuben Earl 

McGuigan, E. L. McGuigan, Louis Burnstein, and International Market. Forecast 

Bureau, doing business at 15 Moore Street, New York, New York, advertised and 

represented himself to be in the business of selling market advice to traders in 

grain, cotton, and other commodities named in the Commodity Exchange Act for 

future delivery. 
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2. From August 1, 1945, to December 5, 1945, respondent sent large numbers of 

telegrams, letters, and circulars to persons and firms throughout the United 

States, advising purchases and sales of commodity futures. He sent collect 

telegrams not only to subscribers to his forecasting service, who numbered less 

than 250, but also to others. Respondent's primary purpose was to manipulate 

the price of the futures to the benefit of his speculative trading in them. 

3. On many occasions during this period, respondent assumed market positions 

for himself in commodity futures, after which he sent out many telegrams 

advising purchases or sales which would favorably affect his position. 

Frequently the transactions caused by his telegrams influenced the price in 

favor of his position, after which he made transactions opposite to those he had 

advised, thus taking profits from the influenced price change. 

4. From June 14 to December 5, 1945, through Irving Weis and Company, New 

York City, respondent bought 2,420,000 bushels of grain and 51,900 bales of 

cotton, and sold 2,460,000 bushels of grain and 51,900 bales of cotton, for 

future delivery on contract markets, at a profit to himself of $ 30,625.75. 

5. In attempting to conceal the fact that he was trading in future for 

himself, respondent carried his account with Irving Weis and Company, the 

broker, in the name of Edith Adelson, his wife's maiden name. On September 5, 

1945, while he was actively trading in this account, he told representatives of 

the United States Department of Agriculture that he did not trade in futures for 

himself. He forged the name of Edith Adelson to a power of attorney dated June 

1, 1945, giving him authority to make purchases and sales, but not to withdraw 

funds from the account. On a number of occasions, in withdrawing funds from the 

account, in the form of the broker's check payable to Edith Adelson, respondent 

endorsed her name to the check and then arranged with the broker to endorse it 

"Please pay cash to bearer," thus enabling him to cash it easily. On November 

15, 1945, when he closed the account, he forged the name Edith Adelson to 

instructions authorizing deposit of the credit balance of $ 19,500 in the 

account to Louis J. Burnstein, and on the following day he opened a new account 

for himself, with the same broker, using the name of Burnstein, and deposited 

therein the $ 19,500. On November 20, 1945, he made out and signed a customer's 

card with the broker, using the name of Burnstein, but dated the card July 20, 

1939, and gave the non-existent address of 140 St. Pauls Place, Brooklyn. On 

November 23, 1945, the Burnstein account was closed out by the issuance of the 

broker's check for $ 17,162.75 payable to Burnstein. The Lawyers Trust Company, 

a New York bank, refused 

to accept this check for deposit because the endorser Burnstein was unknown to 

it. On November 27, in opening a new account for himself with the same broker, 

this time using the name of Reuben McGuigan, respondent deposited this check and 

other funds. He continued to trade in this account until December 5, 1945. 

CONCLUSIONS

Manipulating the price of commodity futures, as respondent successfully did, 

violated section 6(b) of the act (7 U.S.C. 9), authorizing suspension of trading 

privileges on contract markets. No elaboration of respondent's methods of 

operating, shown in the Findings, is necessary to demonstrate that the 

suspension in this instance should not be for a short period. While it seems 

ordinarily preferable to suspend for some particular number of days or years, 

complainant's recommendation of a suspension until further notice should be 

ordered here. 

ORDER

Effective on the 30th day after this date, all contract markets shall refuse 

respondent all trading privileges thereon until further notice by the Secretary 

of Agriculture. Copies of this decision shall be served on the parties or their 

counsel of record, and on each contract market. 
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