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Commodity Futures Trading Commission 

CEA CASES 

NAME: M. J. KING, INC., AND MAX J. KING 

CITATION: 25 Agric. Dec. 583 

DOCKET NUMBER: 136 

DATE: MAY 2, 1966 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 10,553) 

In re M. J. KING, INC., AND MAX J. KING. CEA Docket No. 136. Decided May 2, 

1966. 

Registration requirements -- Records of customers' accounts and segregated 

funds -- Violations -- Suspension of registrations -- Stipulation

Respondents admitted the allegations of the complaint and consented to the 

issuance of an order suspending the registrations of the individual respondent 

and the corporate respondent for 30 and 90 days, respectively, and denying 

trading privileges to them for a like period. 

Mr. Earl L. Saunders for Commodity Exchange Authority. 

Respondents pro se. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

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

1 et seq.), in which the respondents are charged with violating sections 4d and 

4g of the Act (7 U.S.C. 6d, 6g) and sections 1.7, 1.32, 1.34 and 1.35 of the 

regulations issued thereunder (17 CFR 1.7, 1.32, 1.34, 1.35). 

No hearing has been held with respect to this proceeding. On April 27, 1966, 

the respondents submitted a stipulation under section 0.4(b) of the rules of 

practice (17 CFR 0.4(b)), in which they admit the factual allegations in the 

complaint, waive hearing on the charges, and consent to the entry of the order 

contained herein. 

FINDINGS OF FACT

1. Respondent M. J. King, Inc., a New York corporation with its principal 

office and place of business at 171 Duane Street, New York, New York 10013, is 

now, and was at all times material herein, except during the period between 

December 31, 1965, and January 25, 1966, a registered futures commission 

merchant under the Commodity Exchange Act. At all times material herein, the 

respondent corporation had membership privileges on the New York Mercantile 

Exchange, a duly designated contract market under the Commodity Exchange Act. 

2. Respondent Max J. King, an individual, whose business address is 171 Duane 

Street, New York, New York 10013, is now, and was at all times material herein, 

president, manager and a principal stockholder of the respondent corporation and 

a member of the New York Mercantile Exchange. Respondent Max J. King is now 

registered as a floor broker under the Commodity Exchange Act. 

3. At all times material herein, the operations and transactions of the 

respondent corporation were ordered and directed by, or carried out under the 

supervision and control of, respondent Max J. King. At all such times, the 
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respondents were aware of their obligations under the Commodity Exchange Act and 

the regulations with respect to record keeping and registration requirements. 

4. During the period between July 28, 1965, and January 25, 1966, the 

respondent corporation, acting in its capacity as a futures commission merchant, 

carried accounts for customers who traded in commodity futures subject to the 

provisions of the Commodity Exchange Act and regulations. During the same 

period, the respondent corporation did not prepare and maintain a daily record 

of the amount of customers' money required to be held in segregated account, nor 

prepare and maintain a monthly point balance which brought to the official 

closing price all open trades in each customer's account. The records which 

were prepared and maintained by the respondent corporation during the said 

period were incomplete and inaccurate to an extent which made it impossible to 

determine whether the funds held by the respondent corporation for customers 

were, in fact, sufficient to pay all credits and equities due to customers. 

5. During the period between December 31, 1965, and January 25, 1966, the 

respondent corporation acted as a futures commission merchant in soliciting and 

accepting orders for the purchase and 

for the sale of commodity futures subject to the Commodity Exchange Act, without 

being registered with the Secretary of Agriculture as a futures commission 

merchant under the Commodity Exchange Act. 

CONCLUSIONS

The facts admitted by the respondents in their stipulation have been adopted 

as the findings of fact herein. Such facts demonstrate that the respondents 

knowingly and willfully violated sections 4d and 4g of the Commodity Exchange 

Act and sections 1.7, 1.32, 1.34, 1.35 of the regulations, as charged in the 

complaint. 

The complainant states that the administrative officials of the Commodity 

Exchange Authority have carefully considered the proposed stipulation and order 

and that they believe the proposed sanctions are adequate and that the prompt 

entry, without further proceedings, of the order to which the respondents have 

consented will constitute a satisfactory disposition of this case, serve the 

public interest, and effectuate the purposes of the Commodity Exchange Act. The 

complainant recommends, therefore, that the stipulation and waiver submitted by 

the respondents be accepted and that the proposed order be issued. It is so 

concluded. 

ORDER

Effective on the thirtieth day after the date of issuance of this order, (1) 

the registration of respondent Max J. King as a floor broker is suspended for a 

period of thirty (30) days, (2) the registration of respondent M. J. King, Inc., 

as a futures commission merchant is suspended for a period of ninety (90) days, 

and (3) all contract markets shall refuse all trading privileges to the said Max 

J. King for a period of thirty (30) days and to the said M. J. King, Inc., for a 

period of ninety (90) days, such refusal to apply to all trading done and 

positions held by them directly or indirectly. 

A copy of this Decision and Order shall be served on each of the parties and 

on each contract market. 

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