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Commodity Futures Trading Commission 

CEA CASES 

NAME: JOHN S. MORRIS, EVERETT E. KLIPP AND JOHN S. MORRIS AND CO., INC. 

DOCKET NUMBER: 205 

DATE: JANUARY 18, 1973 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: John S. Morris, Everett E. Klipp and John S. Morris and Co., Inc., 

Respondents 

CEA Docket No. 205 

Complaint and Notice of Hearing Under the Commodity Exchange Act 

There is reason to believe that the respondents have violated the Commodity 

Exchange Act, as amended (7 U.S.C. 1 et seq.), hereinafter referred to as the 

Act. This complaint and notice of hearing is issued stating the charges in that 

respect as follows: 

I 

a. John S. Morris and Co., Inc., an Illinois corporation, is now and was at 

all times material herein a registered futures commission merchant under the Act 

and a clearing member of the Chicago Board of Trade. At all times material 

herein, its business address was 141 West Jackson Boulevard, Chicago, Illinois 

60604. 

b. John S. Morris, an individual whose business address is 141 West Jackson 

Boulevard, Chicago, Illinois 60604, is now and was at all times material herein 

president of John S. Morris and Co., Inc. 

c. Everett E. Klipp, an individual whose business address is 141 West Jackson 

Boulevard, Chicago, Illinois 60604, is now and was at all times material herein 

treasurer of John S. Morris and Co., Inc. 

d. Charles E. Evans, Jr., an individual, was, at all times material herein, a 

trader in commodity futures and a customer of John S. Morris and Co., Inc. 

II 

The Chicago Board of Trade is now and was at all times material herein a duly 

designated contract market under the Act. 

III 

The transactions referred to herein relate to the purchase and sale of 

futures contracts in soybeans, wheat and corn on and subject to the rules of the 

Chicago Board of Trade. Such contracts could have been used for (a) hedging any 

transaction in interstate commerce in such commodities or the products or 

byproducts thereof, or (b) determining the price basis of transactions in 

interstate commerce in such commodities, or (c) delivering such commodities 

sold, shipped or received in interstate commerce for the fulfillment thereof. 

IV 

On or about July 27, 1971, Mr. Charles E. Evans, Jr., tendered, and the 

respondents accepted, a certificate representing 2,890.075 shares of Investors 

Mutual, Inc. stock, with the understanding or agreement that such stock would 
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constitute the margin up to approximately $ 25,000 for Mr. Evans' current and 

anticipated futures trading. 

V 

On or about October 8, 1971, the respondents, acting contrary to their 

understanding or agreement with Mr. Evans, closed out his position in the 

futures market on the basis that such stock was not acceptable as margin. This 

action was taken without any notice to Mr. Evans before October 8, 1971, and 

without the authorization of Mr. Evans. The required margin for Mr. Evans' 

account on that day was approximately $ 17,000. 

VI 

By reason of the facts alleged herein, the respondents wilfully violated the 

provisions of section 4b (2) (A) and (C) of the Act (7 U.S.C. 6b (2) (A) and 

(C)). 

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

served upon the respondents and this proceeding shall be governed by sections 

0.1, 0.2, 0.4(b), 0.5 through 0.22 and 0.28 of the rules of practice under the 

Commodity Exchange Act (17 CFR 0.1, 0.2, 0.4(b), 0.5 through 0.22, 0.28). 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, 

Washington, D.C. 20250, an answer with an original and five 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 in Chicago, Illinois, at a 

place therein and date 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 appropriate order should not be 

issued in accordance with the Commodity Exchange Act, (1) suspending or revoking 

the registration of the respondent John S. Morris and Co., Inc., as a futures 

commission merchant, (2) prohibiting the respondents from trading on or subject 

to the rules of any contract market, and directing that all contract markets 

refuse all trading privileges to the respondents for such period of time as may 

be determined and (3) directing that the respondents shall cease and desist from 

violating the Act in the manner alleged herein. 

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. 

January 18, 1973 

[SEE SIGNATURE IN ORIGINAL] 

Richard E. Lyng 

Assistant Secretary 

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