Page 1 

Commodity Futures Trading Commission 

CEA CASES 

NAME: RAYMOND A. GERSTENBERG, RAYMOND M. GERSTENBERG, GERSTENBERG & CO., AND 

JOHN W. DICKSON, JR. 

CITATION: 26 Agric. Dec. 816 

DOCKET NUMBER: 141 

DATE: AUGUST 29, 1967 

DOCUMENT TYPE: DECISION AND ORDER 

NOTE: CORRECTION TO DECISION AND ORDER IS REPORTED IN 26 AGRIC. DEC. 947 

(No. 11,342) 

In re RAYMOND A. GERSTENBERG, RAYMOND M. GERSTENBERG, GERSTENBERG & Co., and 

JOHN W. DICKSON, JR. CEA Docket No. 141. Decided August 29, 1967. 

Fictitious transactions -- Suspension of registrations -- Denial of trading 

privileges -- Stipulation

Fictitious transactions, the bucketing of customers' orders, taking the 

opposite side of a customer's trade and the keeping of false records are 

violations of the act for which suspension of registration and denial of trading 

privileges on the contract markets are ordered. 

The sanctions against two of the respondents are not to become effective 

unless such respondents should be found in violation within a one-year period. 

Earl L. Saunders for Commodity Exchange Authority. 

Mitchell Edelson, Chicago, Ill., for Raymond A. Gerstenberg and Gerstenberg & 

Co. 

Clark, Thomas, Harris, Denius & Winters, Austin, Texas, for Raymond M. 

Gerstenberg. 

Hamper & Reiser, Chicago, Ill., for John W. Dickson, Jr. 

John Curry, Hearing Examiner. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is an administrative proceeding under the Commodity Exchange Act (7 

U.S.C. 1 et seq.), in which the respondents are charged with violating certain 

provisions of the Act and the regulations issued thereunder. No hearing has 

been held. The respondents have filed separate stipulations under section 

0.4(b) of the rules of practice (17 CFR 0.4(b)) in which they admit the facts 

hereinafter set forth insofar as such facts concern the particular respondent, 

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

herein. 

FINDINGS OF FACT

1. Respondents Raymond A. Gerstenberg and Raymond M. Gerstenberg, 

individuals, are now and were at all times material herein members of a 

partnership doing business under the firm name of Gerstenberg & Co., with 

offices and a place of business at Room 763, 141 West Jackson Boulevard, 

Chicago, Illinois. The said partnership is now and was at all times material 

herein a 
Page 2 

registered futures commission merchant under the Commodity Exchange Act and a 

clearing member of the Chicago Board of Trade. Each of the said individual 

respondents is now and was at all times material herein a member of the Chicago 

Board of Trade, and respondent Raymond M. Gerstenberg is now and was at all such 

times a registered floor broker under the Commodity Exchange Act. 

2. Respondent John W. Dickson, Jr., an individual whose business address is 

Room 1169, 141 West Jackson Boulevard, Chicago, Illinois, is now and was at all 

times material herein a member of the Chicago Board of Trade. 

3. The Chicago Board of Trade (Board of Trade of the City of Chicago) is now 

and was at all times material herein a duly designated contract market under the 

Commodity Exchange Act. The transactions referred to herein relate to contracts 

for the purchase and sale of commodity futures on the Chicago Board of Trade. 

Such contracts were capable of being used for hedging transactions in interstate 

commerce in such commodities or the products or by-products thereof, or for 

determining the price basis of transactions in interstate commerce in such 

commodities or the products or by-products thereof, or for delivering such 

commodities sold, shipped, or received in interstate commerce. 

4. On the dates hereinafter listed, respondent Raymond A. Gerstenberg entered 

into, and confirmed the execution of, fictitious transactions in commodity 

futures, in that the said respondent prepared and turned in to respondent 

Gerstenberg & Co. trading cards purporting to show that the following 

transactions had been executed, when, in truth and in fact, no such transactions 

had been executed. 

See original document-page 2 

Price 

Date Quantity (Cents per 1965 Commodity Future (Bushels) Bushel) Purchaser Seller 

2/16 corn March 20,000 127 5/8 Gerstenberg Raymond A. 

& Co. Gerstenberg 

2/16 corn July 20,000 15,000 at Raymond A. Gerstenberg & Co. 

Gerstenberg 

131-1/2 and 5,000 at 

1313/8 

2/18 corn July 15,000 131 1/2 Raymond M. Raymond A. 

Gerstenberg Gerstenberg 

2/19 corn March 10,000 127 1/2 Raymond A. Gerstenberg & Co. 

Gerstenberg 

2/19 corn July 15,000 131 1/2 Raymond A. Gerstenberg & Co. 

Gerstenberg 

2/25 corn May 5,000 129 1/2 Gerstenberg Raymond A. 

& Co. Gerstenberg 

2/26 corn May 5,000 129 3/4 Gerstenberg Raymond A. 

& Co. Gerstenberg 

2/26 corn March 5,000 126 3/4 Raymond A. Gerstenberg & Co. 

Gerstenberg 

3/2 soybeans May 175,000 306 * Raymond A. 

Gerstenberg 

3/2 soybeans July 175,000 306 Raymond A. * 

Gerstenberg 

3/5 oats September 5,000 67 Gerstenberg Raymond A. 

& Co. Gerstenberg 

3/15 corn September 35,000 128 7/8 Raymond A. * 

Gerstenberg 

3/22 oats July 15,000 66 1/4 Gerstenberg Raymond A. 

& Co. Gerstenberg 

3/22 oats September 15,000 67 Raymond A. Gerstenberg & Co. 

Gerstenberg 

5/3 oats May 5,000 72 1/4 Gerstenberg Raymond M. 
Page 3 

 Price 

Date Quantity (Cents per 1965 Commodity Future (Bushels) Bushel) Purchaser Seller 

 & Co. Gerstenberg 

5/3 corn July 5,000 134 1/8 Raymond M. Gerstenberg & Co. 

Gerstenberg 

5/20 oats December 10,000 70 Raymond A. Gerstenberg & Co. 

Gerstenberg 

7/9 corn September 20,000 125 3/8 Raymond A. Gerstenberg & Co. 

Gerstenberg 

7/9 corn July 10,000 129 Gerstenberg Raymond A. 

& Co. Gerstenberg 

7/13 corn July 10,000 127 Gerstenberg Raymond M. 

& Co. Gerstenberg 

7/13 corn September 25,000 124 3/4 Raymond A. Gerstenberg & Co. 

Gerstenberg 

7/26 soybeans August 10,000 278 1/4 * Raymond A. 

Gerstenberg 

7/26 soybeans November 10,000 250 1/4 Raymond A. * 

Gerstenberg 

* a person not a respondent herein 

5. On August 25, 1965, respondent Raymond A. Gerstenberg received for 

execution an order to purchase 15,000 bushels of September oat futures for the 

account of a customer of respondent Gerstenberg & Co. Respondent Raymond A. 

Gerstenberg filled the said order without benefit of execution in the following 

manner: (1) respondent Raymond A. Gerstenberg prepared and turned in to 

respondent Gerstenberg & Co. a trading card purporting to show the purchase from 

Gerstenberg & Co. of 15,000 bushels of September oat futures at 66 cents per 

bushel for the account of the customer, and (2) respondent Raymond A. 

Gerstenberg prepared and turned in to respondent Gerstenberg & Co. a trading 

card purporting to show the sale to Gerstenberg & Co. of the same quantity of 

the same future and at the same price for respondent Raymond A. Gerstenberg's 

own account, thus taking the opposite side of the customer's purchase order into 

respondent Raymond A. Gerstenberg's own account. 

6. On September 10, 1965, respondent Raymond A. Gerstenberg received for 

execution an order to purchase 10,000 bushels of December oat futures for the 

account of a customer of respondent Gerstenberg & Co. Respondent Raymond A. 

Gerstenberg filled the said order without benefit of execution in the following 

manner: (1) respondent Raymond A. Gerstenberg prepared and turned in to 

respondent Gerstenberg & Co. a trading card purporting to show the purchase from 

Gerstenberg & Co. of 10,000 bushels of December oat futures at 67-1/2 cents per 

bushel for the account of the customer, and (2) respondent Raymond A. 

Gerstenberg prepared and turned in to respondent Gerstenberg & Co. a trading 

card purporting to show the sale to Gerstenberg & Co. of the same quantity of 

the same future and at the same price for respondent Raymond A. Gerstenberg's 

own account, thus taking the opposite side of the customer's purchase order into 

respondent Raymond A. Gerstenberg's own account. 

7. With respect to the transactions referred to in paragraphs 4, 5, and 6 

above, respondent Gerstenberg & Co. (1) showed on its books and records that the 

transactions had been executed, and (2) kept the trading cards prepared by 

respondent Raymond A. Gerstenberg as a part of the records of the said firm and 

as a record of respondent Raymond A. Gerstenberg. 

8. On March 8, 1965, respondent Raymond M. Gerstenberg received for execution 

an order to sell two tank cars of July soybean oil futures for the account of a 

customer of respondent 
Page 4 

Gerstenberg & Co. Respondent Raymond M. Gerstenberg filled the said order 

without benefit of execution in the following manner: respondent Raymond M. 

Gerstenberg prepared and turned in to respondent Gerstenberg & Co. (1) a trading 

card purporting to show the sale to Gerstenberg & Co. of two tank cars of July 

soybean oil futures at 11.95 cents per pound for the account of the customer, 

and (2) a trading card purporting to show the purchase from Gerstenberg & Co. of 

the same quantity of the same future and at the same price for respondent 

Raymond M. Gerstenberg's own account, thus taking the opposite side of the 

customer's selling order into respondent Raymond M. Gerstenberg's own account. 

9. On December 20, 1965, respondent Raymond M. Gerstenberg received for 

execution an order to purchase 10,000 bushels of March corn futures for the 

account of a customer of Illinois Cooperative Futures Co., a clearing member of 

the exchange. Respondent Raymond M. Gerstenberg filled the said order without 

benefit of execution in the following manner: respondent Raymond M. Gerstenberg 

(1) prepared and turned in to Illinois Cooperative Futures Co. a trading card 

purporting to show the purchase from John W. Dickson, a clearing member of the 

exchange, of 10,000 bushels of March corn futures at $ 1.24-1/2 per bushel for 

the account of the customer, and (2) prepared and turned in to John W. Dickson a 

trading card purporting to show the sale to Illinois Cooperative Futures Co. of 

the same quantity of the same future and at the same price for respondent 

Raymond M. Gerstenberg's own account at John W. Dickson, thus taking the 

opposite side of the customer's purchase order into respondent Raymond M. 

Gerstenberg's own account. 

10. On July 19, 1965, respondent Raymond M. Gerstenberg received for 

execution an order to purchase 10,000 bushels of August soybean futures for the 

account of a customer of respondent Gerstenberg & Co. Respondent Raymond M. 

Gerstenberg filled the said order without benefit of execution in the following 

manner: (1) respondent Raymond M. Gerstenberg prepared and turned in to 

respondent Gerstenberg & Co. a trading card purporting to show the purchase from 

Gerstenberg & Co. of 5,000 bushels of August soybean futures at $ 2.73 per 

bushel for the account of the customer, and the purchase from John W. Dickson of 

the same quantity of the same future and at the same price for the account of 

the customer; (2) respondent Raymond M. Gerstenberg prepared and turned in to 

respondent Gerstenberg & Co. another trading card purporting to show the sale to 

that firm of 

5,000 bushels of August soybean futures at $ 2.73 per bushel for respondent 

Raymond M. Gerstenberg's own account; and (3) respondent John W. Dickson, Jr., 

acting on the instructions of respondent Raymond M. Gerstenberg, prepared and 

turned in to John W. Dickson a trading card purporting to show the sale to 

respondent Gerstenberg & Co. of 5,000 bushels of August soybean futures at $ 

2.73 per bushel for the account of Raymond M. Gerstenberg at John W. Dickson. 

Thus, respondent Raymond M. Gerstenberg took the opposite side of the customer's 

purchase order into respondent Raymond M. Gerstenberg's own account. Although 

respondent John W. Dickson, Jr., prepared the trading card which he turned in to 

the firm of John W. Dickson to make an interoffice transfer of 5,000 bushels of 

August soybean futures from such firm to respondent Gerstenberg & Co., in 

preparing such trading card respondent John W. Dickson, Jr., recorded the 

interoffice transfer in a manner which indicated that it was competitively 

executed in the pit at a price within the daily price range on July 19, 1965. 

11. With respect to the transactions referred to in paragraphs 8, 9, and 10, 

respondent Gerstenberg & Co. (1) showed on its books and records that the 

transactions had been executed, and (2) kept the trading cards prepared by 

respondent Raymond M. Gerstenberg as a part of the records of the said firm and 

as a record of respondent Raymond M. Gerstenberg. 

12. On July 13, 1965, respondent Gertenberg & Co., having received an order 

to sell 20,000 bushels of July corn futures, knowingly, and without the prior 

consent of its customer, became the buyer in respect to the selling order of 

such customer in that, in filling a part of the said order, respondent Raymond 
Page 5 

M. Gerstenberg, acting as selling floor broker, sold 15,000 bushels of July corn 

futures at $ 1.27 per bushel for the customer's account to respondent Raymond A. 

Gerstenberg who made the corresponding purchase for the corn hedge account of 

respondent Gerstenberg & Co. Neither of the said individual respondents prepared 

a trading card with respect to such transaction which showed his own name and 

identified the opposite floor broker with whom the transaction was executed. 

CONCLUSIONS

By reason of the findings set forth in the Findings of Fact, it is concluded 

that (1) respondents Raymond A. Gerstenberg and 

Raymond M. Gerstenberg entered into, and confirmed the execution of, 

transactions which were fictitious sales, and bucketed customers' orders, in 

violation of sections 4b and 4c of the Commodity Exchange Act (7 U.S.C. 6b, 6c); 

(2) respondent Gerstenberg & Co. knowingly, and without the prior consent of its 

customer, became the buyer in respect to the selling order of such customer, in 

violation of section 4b of the Act; and (3) each of the respondents prepared and 

kept false and incomplete records of futures transactions in violation of 

section 4g of the Act and section 1.35 of the regulations (7 U.S.C. 6g; 17 CFR 

1.35). 

Complainant states that the administrative officials of the Commodity 

Exchange Authority have carefully considered the proposed stipulations 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. 

Complainant recommends, therefore, that the stipulations and waivers submitted 

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

concluded. 

ORDER

Effective October 1, 1967, (1) the registration of respondent Raymond M. 

Gerstenberg as a floor broker is suspended for a period of ten (10) days, and 

(2) all contract markets shall refuse all trading privileges to respondent 

Raymond M. Gerstenberg for a period of ten (10) days and to respondent Raymond 

A. Gerstenberg for a period of thirty (30) days, such refusal to apply to all 

trading done and positions held by them directly or indirectly. 

The registration of respondent Gerstenberg & Co. as a futures commission 

merchant is suspended for a period of ten (10) days, and all contract markets 

shall refuse all trading privileges to respondent Gerstenberg & Co. for a period 

of ten (10) days, Provided, However, that the aforesaid suspension of 

registration and refusal of trading privileges shall not become effective 

unless, after complaint and hearing in accordance with established procedure, 

respondent Gerstenberg & Co. should be found to have violated the Commodity 

Exchange Act within one year from the date of entry of this order, in which 

event the Secretary of Agriculture may, without further notice to respondent 

Gerstenberg & Co., issue a supplemental order making effective forthwith the 

aforesaid suspension of registration and refusal of trading privileges. 

All contract markets shall refuse all trading privileges to respondent John 

W. Dickson, Jr., for a period of five (5) days, Provided, However, that such 

refusal of trading privileges shall not become effective unless, after complaint 

and hearing in accordance with established procedure, respondent John W. 

Dickson, Jr., should be found to have violated the Commodity Exchange Act within 

one year from the date of entry of this order, in which event the Secretary of 

Agriculture may, without further notice to respondent John W. Dickson, Jr., 
Page 6 

issue a supplemental order making effective forthwith such refusal of trading 

privileges. 

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

on each contract market. 

LOAD-DATE: June 8, 2008 
Page 7 
Page 8