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Commodity Futures Trading Commission 

CEA CASES 

NAME: JOSEPH KLEIN AND COMPANY, JOSEPH KLEIN AND RUBIN LAZARUS 

CITATION: 14 Agric. Dec. 648 

DOCKET NUMBER: 70 

DATE: AUGUST 30, 1955 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 4340) 

In re JOSEPH KLEIN AND COMPANY, JOSEPH KLEIN AND RUBIN LAZARUS. CEA Docket No. 

70. Decided August 30, 1955. 

Suspension of Registration -- Denial of Trading Privileges -- Stipulation by 

Respondents -- Jurisdiction of Secretary -- Consent Order

Upon respondent's admission of jurisdictional facts, waiver of oral hearing, 

consent to entry of the order herein, and stipulation, the registration of 

respondent Joseph Klein, as a floor broker, is suspended for a period of 20 

days, and the trading privileges of all contract markets are denied to Joseph 

Klein and Company for a period of 20 days, and the trading privileges of all 

contract markets are denied to Rubin Lazarus for a period of 60 days. 

Mr. Benjamin J. Holstein for Commodity Exchange Authority. Joseph Klein and 

Company, Mr. Joseph Klein, and Mr. Rubin Lazarus, of New York, New York, 

respondents, pro se. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is a quasi-judicial proceeding under the Commodity Exchange Act (7 

U.S.C., Chapter 1) instituted by a complaint and notice of hearing issued under 

Section 6(b) of the Commodity Exchange Act (7 U.S.C. 9) by the Assistant 

Secretary of Agriculture on August 19, 1955. 

The complaint charges that the Klein respondents offered to enter into, 

entered into, and confirmed the execution of transactions in cotton futures 

which were used to cause prices to be reported and recorded which were not true 

and bona fide prices, in wilful violation of Section 4c of the Commodity 

Exchange Act (7 U.S.C. 6c); that respondent Rubin Lazarus also offered to enter 

into and entered into such transactions; and that all three respondents 

attempted to manipulate and did manipulate the market price of cotton and cotton 

futures, in violation of Section 6(b) of the Commodity Exchange Act (7 U.S.C. 

9). 

These charges are based upon allegations that respondent Rubin Lazarus 

ordered the Klein respondents to execute transactions in cotton futures on the 

New York Cotton Exchange, the purpose of which was to establish a predetermined 

numeral as the final digit of the low price of the opening or closing range of a 

previously designated future; and that, on specified dates, respondent Joseph 

Klein bought or sold cotton futures on the New York Cotton Exchange pursuant to 

such instructions at prices which included the specified numerals, confirmed the 

execution of these trades to respondent Lazarus, and caused the transactions to 

be entered in the account of respondent Lazarus on the books of Joseph Klein and 

Company. The complaint also alleges that the Klein respondents accepted these 
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orders and instructions and executed these transactions with knowledge of the 

fact that their purpose was to establish a predetermined price on the New York 

Cotton Exchange. 

No hearing has been held. On August 25, 1955, prior to the date set for 

filing the answer, respondents Joseph Klein and Joseph Klein and Company, acting 

jointly, and respondent Rubin Lazarus, acting separately in his own behalf, 

submitted stipulations under section 0.4(b) of the rules of practice under the 

act (17 CFR 0.4(b)), admitting the facts contained herein under "Findings of 

Fact" and consenting to the entry of the order hereinafter set forth. 

FINDINGS OF FACT

1. Respondent Joseph Klein and Company is a partnership with offices located 

at No. 15 William Street, New York, New York. The said partnership is now and 

was at all times material herein a registered futures commission merchant under 

the Commodity Exchange Act. Respondent Joseph Klein, an individual located at 

the same address, is now and was at all such times the principal partner and the 

manager of respondent Joseph Klein and Company, and a registered floor broker 

under the Commodity Exchange Act. 

2. Respondent Rubin Lazarus is an individual engaged in the textile business 

at 396 Broadway, New York, New York. 

3. At all times material herein, the New York Cotton Exchange was a duly 

designated contract market under the Commodity Exchange Act. 

4. During the period from December 20, 1954, to and including February 15, 

1955, respondents Joseph Klein and Company and Joseph Klein accepted orders for 

transactions in cotton futures on the New York Cotton Exchange, executed and 

confirmed the execution of such orders, and entered the resulting transactions 

on the books of respondent Joseph Klein and Company. 

5. During the period from December 20, 1954, to and including February 15, 

1955, respondent Rubin Lazarus caused the execution for his account of 

transactions in cotton futures on the New York Cotton Exchange. 

CONCLUSIONS

Section 0.4(b) of the rules of practice under the Commodity Exchange Act (17 

CFR 0.4 (b)) provides as follows: 

(b) Consent order. At any time after the issuance of the complaint and prior 

to the hearing in any proceeding, the Secretary, in his discretion, may allow 

the respondent to consent to an order. In so consenting, the respondent must 

submit, for filing in the record, a stipulation or statement in which he admits 

at least those facts necessary to the Secretary's jurisdiction and agrees that 

an order may be entered against him. Upon a record composed of the complaint 

and the stipulation or agreement consenting to the order, the Secretary may 

enter the order consented to by the respondent, which shall have the same force 

and effect as an order made after oral hearings. 

The facts admitted by the respondents and set forth in the Findings of Fact 

are sufficient to subject them and each of them to the jurisdiction of the 

Secretary of Agriculture. 

The complainant has filed a recommendation which recites that it has 

carefully considered the stipulations and the terms of the order to which the 

respondents propose to consent, and which states that the prompt entry of such 

an order without further proceedings would provide adequate sanctions, 

constitute a satisfactory disposition of the case, serve the public interest, 

and effectuate the purposes of the Commodity Exchange Act. For 
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these reasons, the complainant recommends that the waivers be accepted and that 

the order to which the respondents have consented be issued. It is so 

concluded. 

ORDER

Effective September 12, 1955, the registration of respondent Joseph Klein as 

a floor broker under the Commodity Exchange Act is suspended for a period of 

twenty (20) days. 

Effective September 12, 1955, all contract markets shall refuse all trading 

privileges to Joseph Klein and Company and Joseph Klein for a period of twenty 

(20) days. Such refusal shall apply to all trading done and positions held 

directly by the said Joseph Klein and Company and Joseph Klein, or either of 

them, and also to all trading done and positions held indirectly through persons 

or firms owned or controlled by them, or either of them, or otherwise, provided,

that such refusal shall not be construed to prohibit the execution of bona fide 

orders received from customers by the said Joseph Klein and Company in its 

capacity as a registered futures commission merchant, provided, further, that 

such orders shall not be executed by the said Joseph Klein. 

Effective September 12, 1955, all contract markets shall refuse all trading 

privileges to Rubin Lazarus for a period of sixty (60) days, such refusal to 

apply to all trading done and positions held by the said Rubin Lazarus directly, 

and also to all trading done and positions held indirectly through persons owned 

or controlled by him, or otherwise. 

A copy of this decision and order shall be served upon each of the parties by 

registered mail or in person and upon each contract market. 

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