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Commodity Futures Trading Commission 

CEA CASES 

NAME: WILLIAM LUDWIG 

CITATION: 20 Agric. Dec. 183 

DOCKET NUMBER: 94 

DATE: MARCH 28, 1961 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 7042) 

In re WILLIAM LUDWIG. CEA Docket No. 94. Decided March 28, 1961. 

Violation of Reporting Requirements -- Denial of Trading Privileges

Respondent's failure to file an answer to the complaint constitutes an 

admission of the facts alleged in the complaint. All contract markets shall 

refuse all trading privileges to respondent for one year. 

Mr. Benj. M. Holstein, for Commodity Exchange Authority. Mr. Jack W. Bain, 

Hearing Examiner. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is a proceeding under the Commodity Exchange Act (7 U.S.C. Chapter 1), 

in which the respondent, a member of the Chicago Mercantile Exchange and a 

trader in commodity futures, is charged with failing to submit required reports 

and submitting false reports in connection with his trading in egg futures, and 

with exceeding the maximum limits on positions and trading in egg futures. The 

complaint alleges that these violations were deliberate and wilful because the 

respondent had previously been charged with violating the act in the same 

respects, as a result of which a consent order had been issued (14 Agric. Dec. 

348 (14 A.D. 348)) denying trading privileges to him for 30 days, 

effective July 1, 1955. A portion of the trading involved in the violations 

charged in this proceeding occurred during the effective period of such 

sanction, and such trading was done by means of accounts which were carried in 

the names of persons other than the respondent. 

At the time of service of the complaint, respondent was notified, in effect, 

that failure to file an answer would constitute an admission of the facts 

alleged in the complaint and a waiver of oral hearing. Notwithstanding such 

notice, respondent has not filed an answer. The matter was referred to Jack W. 

Bain, Hearing Examiner, Office of Hearing Examiners, United States Department of 

Agriculture, for the preparation of a report without further investigation or 

hearing pursuant to section 0.9(c) of the rules of practice (17 CFR 0.9(c)). 

The hearing examiner or referee filed a report February 9, 1961, recommending 

that respondent be denied all trading privileges on all contract markets for a 

period of one year. No exceptions to the referee's report were filed. 

FINDINGS OF FACT

1. Respondent, William Ludwig, is an individual whose address is 180 Duane 

Street, New York, New York. He is now and was at all times material herein a 

member of the Chicago Mercantile Exchange. 
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2. The Chicago Mercantile Exchange is now and was at all times material 

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

3. At various periods during 1955 and 1956, the respondent traded in egg 

futures on the Chicago Mercantile Exchange through Fox DeLuxe Foods, Inc., in 

accounts carried in the names of William Ludwig, Edson Eldredge, and Charles 

Colangelo. All transactions in such accounts during such periods belonged to or 

were controlled by the respondent. 

4. On each day from June 29 to July 11, 1955, the respondent held or 

controlled a net long position in egg futures on the Chicago Mercantile Exchange 

in one or more of the above named accounts, which position ranged from 33 to 43 

carlots in a single future. By reason of the fact that such quantities were 

equal to or in excess of 25 carlots, the respondent was in reporting status and 

was required to report to the Commodity Exchange Authority with respect to all 

transactions 

executed and all open contract positions held or controlled by him, in all egg 

futures on all boards of trade (exchanges) during the period and with respect to 

all transactions by reason of which the respondent's position was reduced below 

reporting levels. 

5. On June 29 and 30, 1955, while the respondent was in reporting status as 

described in Finding of Fact 4, and on July 11, 1955, when the respondent's 

position was reduced below 25 carlots, transactions in egg futures on the 

Chicago Mercantile Exchange were executed on his behalf in two of the above 

named accounts, but the respondent failed to report to the Commodity Exchange 

Authority with respect to such transactions. 

6. At various times from August 2 through December 19, 1955, the respondent 

held or controlled a net long position in egg futures on the Chicago Mercantile 

Exchange in the amount of 25 or more carlots in a single future. By reason 

thereof, respondent was in reporting status and was required to submit reports 

to the Commodity Exchange Authority as described in Finding of Fact 4. On 20 

days within such period, on each of which days the respondent was in reporting 

status, transactions in egg futures on the Chicago Mercantile Exchange were 

executed on behalf of the respondent in one or more of the above named accounts, 

but respondent failed to submit reports to the Commodity Exchange Authority on 

seven of such days and submitted false reports with respect to the remaining 13 

days. 

7. On December 8 and 9, 1955, respondent held or controlled total speculative 

net long positions of 74 and 98 carlots, respectively, in the December 1955 egg 

future on the Chicago Mercantile Exchange in the above named accounts. 

8. From December 20, 1955, through January 24, 1956, respondent held or 

controlled speculative net long positions which ranged between 51 and 98 carlots 

in the January 19561 egg future on the Chicago Mercantile Exchange in the above 

named accounts. 

9. On each day from December 20, 1955, through January 24, 1956, respondent 

held or controlled a net long position in egg futures on the Chicago Mercantile 

Exchange in the above named accounts, of 25 or more carlots in a single future, 

by reason of which respondent was in reporting status and was 

required to submit reports to the Commodity Exchange Authority, as described in 

Finding of Fact 4. On 17 days within such period, on each of which days 

respondent was in reporting status, transactions in egg futures on the Chicago 

Mercantile Exchange were executed on his behalf in one or more of the said 

accounts, but respondent failed to submit reports to the Commodity Exchange 

Authority on four of such days and submitted false reports to the Commodity 

Exchange Authority with respect to the remaining 13 days. 
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10. On March 22, 1955, a complaint was issued in CEA Docket No. 66, charging 

that the respondent exceeded the speculative limits on daily trading and 

positions in eggs for future delivery on the Chicago Mercantile Exchange during 

various periods in 1954 and 1955, and that respondent filed false reports 

covering his trading and positions. On April 21, 1955, in response to such 

charges, the respondent submitted a stipulation in which he consented to an 

order directing all contract markets to refuse all trading privileges to him for 

a period of 30 days effective July 1, 1955, and such an order was issued May 11, 

1955 (14 Agric. Dec. 348 (14 A.D. 348)), applying to all trading done and 

positions held by William Ludwig directly or indirectly. 

CONCLUSIONS

Section 4i of the act (7 U.S.C. 6i) requires every person who trades in 

futures to submit reports with respect to such trading "whenever such person 

shall directly or indirectly have or obtain a long or short position in any 

commodity or in any future of such commodity, equal to or in excess of such 

amount as shall be fixed from time to time by the Secretary of Agriculture." The 

quantity fixed by the Secretary of Agriculture for reporting purposes under the 

above provision is 25 carlots in any one egg future (17 CFR 5.21). This 

regulation has been in effect continuously since several years prior to the 

trading described in the complaint. Other sections of the regulations prescribe 

the manner in which reports should be filed, the time for filing, and the 

information to be furnished in the reports (17 CFR 5.10, 5.11, 5.12). 

Section 4a of the act (7 U.S.C. 6a) directs the Commodity Exchange Commission 

to "fix such limits on the amount of trading under contracts of sale of [a] 

commodity for future 

delivery on or subject to the rules of any contract market which may be done by 

any person as the commission finds is necessary to diminish, eliminate, or 

prevent" burdens on interstate commerce caused by excessive speculation. By 

order issued August 3, 1951, the Commission fixed 50 carlots as the maximum 

position which any person may hold or control in the December egg future and the 

same quantity as the maximum position limit for the January egg future (17 CFR 

150.5). This order has been in effect continuously since its issuance. 

The respondent has not answered the complaint. Under the rules of practice, 

his failure to do so must be construed as an admission of all the material 

allegations therein and such allegations have been adopted as the Findings of 

Fact of this Decision and Order. From these findings, it appears that the 

respondent failed or refused to submit reports on 14 different occasions when he 

was required to do so, that he submitted false reports on 26 other occasions, 

and that he held positions in egg futures on several occasions in amounts 

ranging from one carlot to 48 carlots in excess of the permissible maximum. 

These violations occurred by means of trading in accounts carried in the 

names of other persons, and part of this trading was done at a time when the 

respondent was subject to an order denying trading privileges to him for 

previous violations identical in nature with those charged in this proceeding. 

We must, therefore, conclude that these violations were not only knowing and 

wilful, but were undertaken with deliberation and with intent to conceal. 

Upon consideration of all factors and in view of the flagrant nature of the 

violations, it is concluded that all contract markets should be directed to 

refuse all trading privileges to the respondent for a period of one year, such 

refusal to apply to all trading done and positions held by the respondent 

directly or indirectly. 

ORDER

Effective May 1, 1961, all contract markets shall refuse all trading 

privileges to William Ludwig for a period of one year, such refusal to apply to 

all trading done and positions held by him directly or indirectly. 
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A copy of this decision and order shall be served on the respondent and on 

each contract market. 

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