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Commodity Futures Trading Commission 

CEA CASES 

NAME: WARD MERCANTILE, INC., AND PHILIP J. FULLERTON 

CITATION: 30 Agric. Dec. 1426 

DOCKET NUMBER: 179 

DATE: OCTOBER 20, 1971 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 14,213) 

In re WARD MERCANTILE, INC., and PHILIP J. FULLERTON. CEA Docket No. 179. 

Decided October 20, 1971. 

Consent order -- Violation of financial requirements -- Cease and desist

Respondents consented to the issuance of a cease and desist order against 

them for failing to meet the minimum financial requirements prescribed for 

futures commission merchants. 

Earl L. Saunders for Commodity Exchange Authority. 

Respondents pro se. 

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.), instituted by a complaint and notice of hearing issued on 

August 20, 1971. The respondents are charged with violating section 4f of the 

Act (7 U.S.C. 6f) and section 1.17 of the regulations thereunder (17 CFR 1.17). 

No hearing has been held in this proceeding. The respondents have filed a 

stipulation under section 0.4(b) of the rules of practice (17 CFR 0.4(b)) in 

which they admit the facts hereinafter set forth in paragraphs one and two of 

the Findings of Fact, (2) admit, for the purposes of this proceeding and for 

such purposes only, the facts hereinafter set forth in paragraphs three and four 

of the Findings of Fact, (3) waive the report of the Hearing Examiner, and (4) 

consent to the entry of the order contained herein. 

FINDINGS OF FACT

1. Respondent Ward Mercantile, Inc., is now, and was at all times material 

herein, a corporation organized and existing under the laws of the State of New 

York, with offices at 6 Harrison Street, New York, New York 10013. The said 

corporation is now, and was at all such times, a registered futures commission 

merchant under the Commodity Exchange Act, engaged in trading in commodities for 

future delivery for the accounts of customers and holding for such customers 

sums of money, representing deposits of margin by and trading profits accruing 

to such customers. At all such times, the said corporation was subject to the 

minimum financial requirements specified in section 1.17 of the regulations 

under the Commodity Exchange Act (17 CFR 1.17). 

2. Respondent Philip J. Fullerton, an individual, is now, and was at all 

times material herein, secretary-treasurer of the respondent corporation, and 

responsible for the management, direction and control of its activities. 

3. During the period from August 31, 1970 through October 19, 1970, 

respondent Ward Mercantile, Inc., engaged as a registered futures commission 

merchant under the Commodity Exchange Act while failing to meet the minimum 
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financial requirements prescribed by section 1.17 of the regulations issued by 

the Secretary of Agriculture under the Act. As of August 31, 1970, the 

respondent corporation lacked approximately $ 33,560 of having enough working 

capital to meet such minimum financial requirements. This insufficiency was not 

corrected until October 20, 1970. 

4. Having reason to believe that the respondent corporation was not meeting 

the minimum financial requirements prescribed in section 1.17 of the regulations 

under the Commodity Exchange Act, T. Reed McMinn, Director of the Commodity 

Exchange Authority's Eastern Region, on January 20, 1970, warned the corporation 

in writing as follows: "It is your firm's responsibility at all times to meet 

the financial requirements . . ." prescribed in section 1.17. To correct the 

working capital insufficiency at the time, respondent Fullerton on or about 

February 13, 1970, loaned the corporate respondent $ 100,000 and subordinated 

the loan to the claims of the other general creditors. 

CONCLUSIONS

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

that, as charged in the complaint, the respondents violated section 4f of the 

Commodity Exchange Act, and section 1.17 of the regulations thereunder (17 CFR 

1.17). The complainant states that the administrative officials of the 

Commodity Exchange Authority have carefully considered the stipulation submitted 

by the respondents. The administrative officials believe that the prompt entry 

of the proposed order would constitute a satisfactory disposition of this case, 

serve the public interest and effectuate the purposes of the Act. The 

complainant recommends, therefore, that the stipulation be accepted and the 

proposed order be issued. It is concluded that the complainant's recommendation 

should be adopted. 

ORDER

Effective on the date of service of this order upon respondent Ward 

Mercantile, Inc., it shall cease and desist from engaging as futures commission 

merchant without meeting the minimum financial requirements prescribed by 

section 1.17 of the regulations (17 CFR 1.17) issued under the Commodity 

Exchange Act. 

Effective on the date of service of this order upon respondent Philip J. 

Fullerton, he shall cease and desist from wilfully causing, aiding, abetting, 

counseling, commanding or inducing Ward Mercantile, Inc., or any other futures 

commission merchant, to engage as futures commission merchant without meeting 

the minimum financial requirements prescribed by section 1.17 of the regulations 

(17 CFR 1.17) issued under the Commodity Exchange Act. 

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

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