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Commodity Futures Trading Commission 

CEA CASES 

NAME: TYSON FOODS, INC., DONALD TYSON, JOE FRED STARR, ROBERT BONE, KEITH ESTEP, 

BELL EGG FARMS, INC., NORMAN BELL, WILLIAM R. NEWTON, AND RUTH NEWTON 

DOCKET NUMBER: 202 

DATE: OCTOBER 2, 1972 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re: Tyson Foods, Inc., Donald Tyson, Joe Fred Starr, Robert Bone, Keith 

Estep, Bell Egg Farms, Inc., Norman Bell, William R. Newton, and Ruth Newton, 

Respondents 

CEA Docket No. 202 

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. Tyson Foods, Inc., hereinafter referred to as Tyson, an Arkansas 

corporation with its principal office and place of business at 2210 West Oaklawn 

Drive, Springdale, Arkansas 72764, is now and was at all times material herein 

principally engaged in the production and sale of poultry and eggs. 

b. Donald Tyson, an individual whose business address is the same as that of 

Tyson Foods, Inc., is now and was at all times material herein, a principal 

shareholder, a director and the chief executive officer of Tyson. 

c. Joe Fred Starr, an individual whose business address is the same as that 

of Tyson, is now and was at all times material herein a shareholder and a 

director of Tyson and the president of Chicken Hut Systems, Inc., a wholly owned 

subsidiary of Tyson. 

d. Robert Bone, an individual whose business address is the same as that of 

Tyson, is now and was at all times material herein a shareholder and a vice 

president of Tyson. 

e. Keith Estep, an individual whose business address is Tyson's Pride of 

Oklahoma, Inc., Box 18774, Oklahoma City, Oklahoma 73118, is now and was at all 

times material herein, a shareholder of Tyson and manager of Tyson's Pride of 

Oklahoma, an Oklahoma corporation and a wholly owned subsidiary of Tyson. 

f. Bell Egg Farms, Inc., a Delaware corporation with its principal office and 

place of business at Route 1, P. O. Box 223, A, Joplin, Missouri 64801, is now 

and was at all times material herein engaged in the production of eggs. 

g. Norman Bell, an individual whose business address is the same as that of 

Bell Egg Farms, is now and was at all times material herein, a shareholder, a 

director and the president, treasurer and manager of Bell Egg Farms, Inc., and a 

shareholder of Tyson. 

h. William R. Newton, an individual whose business address is Newton Clinic, 

402 N. Jefferson, Cameron, Texas 76520, is now and was at all times material 

herein, a commodity futures trader. 
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i. Ruth Newton, an individual whose address is 902 East 8th Street, Cameron, 

Texas 76520, is now and was at all times material herein, the wife of William R. 

Newton and a commodity futures trader. 

II 

The Chicago Mercantile Exchange is now and was at all times material herein a 

duly designated contract market under the Act. 

III 

The transactions referred to in this complaint relate to the purchase and 

sale of September 1970 shell egg futures contracts on and subject to the rules 

of the Chicago Mercantile Exchange. Trading in this contract began on October 

10, 1969, and ended on September 21, 1970. Cash eggs could be delivered in 

satisfaction of such futures contracts on any business day in the month of 

September, 1970. 

IV 

During the period September 1, 1970 - September 21, 1970, respondents held a 

large aggregate long position in the September 1970 shell egg future. On 

September 1, 1970, the first day of the delivery month, they held 880 of 4977 

long contracts, 17.7% of the open interest; on September 2, 1970, they held 885 

of 4719 long contracts, 18.8% of the open interest; on September 18, 1970, the 

next-to-last day of trading in the future, they held 465 of 1036 long contracts, 

44.9% of the open interest; on September 21, 1970, the last trading day, they 

held 231 of 233 long contracts, 99.1% of the open interest. 

V 

During the period September 2, 1970 - September 8, 1970, futures traders 

other than the respondents received delivery of 25 carlots of eggs against their 

long futures positions. Of these, respondent Tyson bought from the traders who 

received them 21 carlots before they could be redelivered. Of the other four 

carlots, Tyson bought three carlots after the first redelivery. These 24 

carlots of eggs were subsequently sold by Tyson at substantial losses. Of these 

eggs, 21 carlots were disposed of in such a way that they were not eligible for 

redelivery against futures contracts and 15 carlots were not sold until after 

the expiration of trading in the September 1970 shell egg future. 

VI 

During the period September 9, 1970 - September 18, 1970, respondent Tyson 

received delivery of 48 carlots of eggs against its long futures position. 

These eggs were sold to cash outlets at prices substantially less than Tyson 

could have received by redelivering them on the September 1970 shell egg future. 

Of these eggs, 43 carlots were disposed of in such a way that they were not 

eligible for redelivery against futures contracts and 42 carlots were not sold 

until after the expiration of trading in the September 1970 shell egg future. 

VII 

At the beginning of futures trading on September 21, 1970, the last day of 

trading in the September 1970 shell egg future, the aggregate long position of 

the respondents, 465 contracts, was in excess of the available deliverable 

supply of cash eggs. It was, therefore, impossible for all holders of short 

contracts to satisfy such short contracts without purchasing futures or 

deliverable cash eggs from the respondents. 

VIII 

On September 21, 1970, the last day of trading in the September 1970 shell 

egg future, the respondents placed orders for futures sales to offset their long 

positions. These orders set price limits, below which sales could not be made, 

ranging from 47.10 cents to 48.55 cents per dozen. Respondents sold future 
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contracts on that day at prices ranging from 47.15 cents to 48.20 cents per 

dozen. Such prices were abnormally and artificially high. Some of the orders 

could not be executed at the prices demanded, leaving respondents with a large 

aggregate long position, 231 contracts, open at the termination of trading. 

IX 

The 231 open long contracts in the September 1970 shell egg future held by 

respondents at the termination of trading in that future were settled by 

delivery of cash eggs after September 21, 1970. 

Most of the 181 carlots of cash eggs so delivered were sold by the respondents 

at prices substantially less than the closing future price. 

X 

In all of the aforesaid transactions, the respondents, in accordance with an 

arrangement or understanding among them, acted for the purpose and with the 

intent of causing, and did cause, prices in the September 1970 shell egg future 

to be abnormally and artificially high. 

XI 

By reason of the facts alleged in this complaint, the respondents attempted 

to manipulate and did manipulate the price of the September 1970 shell egg 

future on September 21, 1970, in willful violation of sections 6(b), 6(c) and 

9(b) of the Commodity Exchange Act (7 U.S.C. 9, 13b and 13(b)). 

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 at a time and place 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) 

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 (2) directing that the respondents 

shall cease and desist from violating the Commodity Exchange Act in the manner 

alleged herein. 

Done at Washington, D. C. 

October 2, 1972 

[SEE SIGNATURE IN ORIGINAL] 
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Richard E. Lyng 

Assistant Secretary 

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