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Commodity Futures Trading Commission 

CEA CASES 

NAME: M. RICHER SONS, ISADORE RICHTER AND FRED RICHTER 

DOCKET NUMBER: 51 

DATE: JULY 21, 1949 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re M. Richter Sons, Isadore Richter and Fred Richter, Respondents 

CE-A Docket No. 51 

Complaint and Notice of Hearing under Section 6(b) of the Commodity Exchange 

Act 

The Secretary of Agriculture has reason to believe that the respondents, M. 

Richter Sons, Isadore Richter and Fred Richter, have violated the provisions of 

the Commodity Exchange Act (7 U.S.C., Chapter 1) and the rules and regulations 

made pursuant to its requirements. In accordance with the provisions of section 

6(b) of the Commodity Exchange Act (7 U.S.C. 9), this complaint is issued 

alleging as follows: 

1. 

M. Richter Sons is a partnership composed of Isadore Richter and Fred 

Richter, with its principal place of business located at 1114-1116 West Fulton 

Market, Chicago, Illinois. The said partnership was at all times material to 

this complaint and is now registered as a futures commission merchant under the 

Commodity Exchange Act. Isadore Richter was at all times material to this 

complaint a member of the Chicago Mercantile Exchange, a duly designated 

contract market under the Commodity Exchange Act, and the said partnership had 

membership 

trading privileges on the Chicago Mercantile Exchange at all such times and has 

such privileges at the present time. 

2. 

On June 3, June 6, June 8 and June 10, 1949, pursuant to orders given by one 

Albert Feldstein, a customer of the respondent partnership, the respondents 

purchased October 1949 egg futures on the Chicago Mercantile Exchange, in the 

aggregate amount of 72 carlots. On June 9 and June 10, 1949, pursuant to orders 

given by the said Albert Feldstein, the respondents sold October 1949 egg 

futures on the Chicago Mercantile Exchange, in the aggregate amount of 72 

carlots. The aforesaid purchases and sales were for the account and risk of the 

said Albert Feldstein, but were entered and shown on the books and records of 

the respondent partnership as having been made for the account of M. Richter 

Sons, with nothing to indicate that the said Albert Feldstein had any interest 

in the said purchases or sales. By reason of such acts the respondents failed 

to evidence the aforesaid transactions by a record in writing showing the true 

parties thereto, as required by section 4 of the Commodity Exchange Act and 

section 1.37 of the rules and regulations thereunder, and failed to keep books 

and records pertaining to such transactions in the form and manner required by 

the Secretary of Agriculture, in violation of section 4g of the Commodity 

Exchange Act. 
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3. 

The respondent partnership received no money, securities or property from the 

said Albert Feldstein to margin, guarantee or secure the 

purchases and sales described in paragraph 2 above, but deposited its own funds 

with the clearing house of the Chicago Mercantile Exchange for that purposes and 

used its own funds to settle the said transactions. Profits accruing to the 

said Albert Feldstein as a result of the said transactions were caused by the 

respondents to be shown on the books of the clearing house of the Chicago 

Mercantile Exchange as funds belonging to M. Richter Sons. By reason of such 

act, the respondents failed to treat and deal with funds accruing to the said 

Albert Feldstein as the result of his trades as funds belonging to the said 

Albert Feldstein, and commingled such funds with their own funds, in violation 

of section 4d(2) of the Commodity Exchange Act. 

4. 

On June 6, 1949, as the result of the purchase of 14 carlots of October 1949 

egg futures on the Chicago Mercantile Exchange by the respondent partnership, 

which purchase was in truth and in fact for the account and risk of the said 

Albert Feldstein, the net long position in October 1949 egg futures on the 

Chicago Mercantile Exchange carried by the respondents for the said Albert 

Feldstein reached a quantity in excess of 25 carlots and remained in excess of 

25 carlots until June 10, 1949. On June 10, 1949, as the result of the sale of 

42 carlots of October 1949 egg futures on the Chicago Mercantile Exchange by the 

respondent partnership, which sales were in truth and in fact for the account 

and risk of the said Albert Feldstein, 

the net long position in October 1949 egg futures on the Chicago Mercantile 

Exchange carried by the respondent partnership in its own name but actually for 

the account of the said Albert Feldstein was entirely liquidated. On June 8, 

June 9 and June 10, 1949, on each of which dates the long position in October 

1949 egg futures carried by the respondent for the account of the said Albert 

Feldstein was in excess of 25 carlots as above described, additional purchases 

and sales of October 1949 egg futures were executed on the Chicago Mercantile 

Exchange by the respondent partnership for the account of the said Albert 

Feldstein. On June 6, June 8, June 9 and June 10, 1949, the aforesaid purchases 

and sales and the open contracts resulting therefrom were reported to the 

Commodity Exchange Authority by the respondents as having been made for the 

account of M. Richter Sons whereas, in truth and in fact, the said purchases and 

sales were made for the account of the said Albert Feldstein. By reason of such 

acts the respondents falsely reported to the Commodity Exchange Authority 

transactions and open contracts for their own account and failed to report 

transactions and open contracts of a customer as required by section 4i of the 

Commodity Exchange Act and sections 5.04, 5.05, 5.06 and 5.07 of the rules and 

regulations thereunder. 

5. 

The transactions in commodity futures described in paragraphs 2, 3 and 4 were 

capable of being used for hedging transactions in 

interstate commerce in eggs or the products or by products thereof or for 

determining the price basis of transactions in interstate commerce in eggs, or 

for delivering eggs sold, shipped or received in interstate commerce. 

Therefore the said respondents, M. Richter Sons, Isadore Richter and Fred 

Richter, are hereby notified to be and appear at a hearing to be held at 10 

o'clock a.m., central daylight saving time, on the 18th day of August, 1949, in 
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Room 1200, Board of Trade Building, 141 West Jackson Boulevard, Chicago, 

Illinois, before a referee designated to conduct such hearing and then and there 

show cause, if any there be why an order should not be made revoking or 

suspending the registration of the said M. Richter Sons as a futures commission 

merchant, and directing that all contract markets refuse all trading privileges 

to the respondents until further notice by the Secretary of Agriculture. 

The respondents will have twenty days after the receipt of this notice of 

hearing in which to file with the Hearing Clerk, United States Department of 

Agriculture, in triplicate, an answer fully and completely stating the nature of 

the defense and admitting or denying specifically and in detail each material 

and relevant allegation of this complaint. Allegations that are not answered 

will be deemed admitted for the purpose of this proceeding. 

It is ordered that this complaint and notice of hearing be served on the 

respondents by delivery of a true copy thereof to each of them by an employee of 

the Department of Agriculture, or by registered mail, at least twenty days prior 

to the date set for hearing. 

Done at Washington, D. C., this 21 day of July, 1949. 

/s/ Charles F. Brannan 

Secretary of Agriculture 

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