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Commodity Futures Trading Commission 

CEA CASES 

NAME: SECRETARY OF AGRICULTURE V. S. W. GONGOLL, S. W. GONGOLL & COMPANY, 

GENERAL EQUITIES, INC., FINANCIAL DISTRIBUTORS, INC., FINANCIAL ASSOCIATES OF 

ILLINOIS, INC., FINANCIAL ASSOCIATES OF MINNESOTA, INC., FINANCIAL ASSOCIATES OF 

FLORIDA, INC., FINANCIAL ASSOCIATES OF SOUTH DAKOTA, INC., AND UNIT PLAN TRADING 

COMPANY 

DOCKET NUMBER: 7 

DATE: NOVEMBER 3, 1938 

DOCUMENT TYPE: DECISION AND ORDER 

DEPARTMENT OF AGRICULTURE 

WASHINGTON 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

C. E. A. DOCKET NO. 7. 

Secretary of Agriculture, Complainant, v. S. W. Gongoll, S. W. Gongoll & 

Company, General Equities, Inc., Financial Distributors, Inc., Financial 

Associates of Illinois, Inc., Financial Associates of Minnesota, Inc., Financial 

Associates of Florida, Inc., Financial Associates of South Dakota, Inc., and 

Unit Plan Trading Company, Respondents. 

Proceedings, Findings of Fact, Conclusions and Order. 

PROCEEDINGS 

On August 25, 1938, complaint was issued by the Secretary of Agriculture, 

pursuant to the provisions of the Commodity Exchange Act (7 U. S. C. and Supp. 

III, Secs. 1-17a), against the above-named respondents. In the complaint it was 

alleged that, at various times during 1937 and 1938, S. W. Gongoll held and 

controlled positions in commodity futures of the size required by the rules and 

regulations to be reported, without reporting as required; that on various 

occasions he filed false reports; that through various connections he controlled 

the trading of all 

respondents in commodity futures; that each of the respondents, through various 

plans and devices, engaged as futures commission merchant without having 

registered and without segregating the funds of customers; and that all of the 

respondents failed and refused to keep their books and records pertaining to 

futures transactions open to inspection by representatives of the Department of 

Agriculture. Respondents were notified to appear at a hearing in Minneapolis, 

Minnesota, on September 14, 1938, before a referee, to show cause why an order 

should not be made directing all contract markets to refuse them trading 

privileges. 

The complaint was served upon each respondent by registered mail. On motion 

of respondents, the hearing was postponed to November 12, 1938. Before that 

date, S. W. Gongoll, sole trader doing business as S. W. Gongoll and Company, 

was adjudged a bankrupt in the Fourth Division of the United States District 

Court for the District of Minnesota. In the bankruptcy proceedings, the court 

took jurisdiction over each of the respondents involved herein, and ordered Eloi 

Bauers, the receiver in bankruptcy, to take control of them and custody of all 

their assets. The receiver was authorized by order of the court to consent to 

issuance of an order denying each of the respondents trading privileges on 
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contract markets. Thereupon, a stipulation waiving hearing and consenting to 

entry of 

an order herein, and admitting, for the purposes hereof, the facts alleged in 

the complaint, was signed by William E. G. Watson, counsel for S. W. Gongoll 

individually and doing business as S. W. Gongoll and Company and as Unit Plan 

Trading Company, and by Eloi Bauers, Receiver, on behalf of all other 

respondents. 

In view of the waiver of respondents, no formal hearing was held. 

FINDINGS OF FACT 

1. S.W. Gongoll, whose business address is 200 Foshay Tower, Minneapolis, 

Minnesota, is an individual doing business as S. W. Gongoll and Company and as 

Unit Plan Trading Company. 

2. General Equities, Incorporated, Financial Distributors, Incorporated, 

Financial Associates of Minnesota, Incorporated, Financial Associates of 

Florida, Incorporated, and Financial Associates of South Dakota, Incorporated, 

are corporations whose business address is 200 Foshay Tower, Minneapolis, 

Minnesota. 

3. Financial Associates of Illinois, Incorporated, is a corporation whose 

business address is 135 South La Salle Street, Chicago, Illinois. 

4. On or about August 2, 1937, and continuously to August 26, 1937, S. W. 

Gongoll, acting by and through the other respondents 

named herein, and by and through himself, and by accounts controlled by himself, 

held and controlled open contracts in a single future of one of the commodities 

defined as grain in the rules and regulations under the Commodity Exchange Act, 

on one contract market, totaling more than 200,000 bushels; and on January 7, 

1938, acting as aforesaid, held and controlled open contracts in the May wheat 

future on the Board of Trade of the City of Chicago, a contract market, totaling 

200,000 bushels or more, and failed to report such holdings to the Commodity 

Exchange Administration on form 203, as required by said rules and regulations. 

5. On numerous other occasions during the last five months of 1937 and during 

1938, S. W. Gongoll, acting by and through the other respondents herein, and by 

and through himself, hold and controlled open contracts in a single future of 

one of the commodities defined as grain in said rules and regulations, on one 

contract market, totaling more than 200,000 bushels, without reporting to the 

Commodity Exchange Administration on form 203 as required by said rules and 

regulations. 

6. On August 2, 1937, and on various dates thereafter, up to and including 

October 7, 1937, the said S. W. Gongoll, acting by and through one or more of 

the other respondents, held or controlled open contracts in a single future of 

one or more of the 

commodities defined as grain in said rules and regulations, on one contract 

market, totaling more than 200,000 bushels, and at such times filed reports with 

the Commodity Exchange Administration on form 203, which reports did not truly 

and correctly show for the dates covered thereby the amount of open contracts 

held or controlled by him, or the amount of such grain bought and the amount 

sold by him individually or by or through the other respondents for future 

delivery, all in violation of said rules and regulations. 

7. Respondent S. W. Gongoll, through various connections with each of the 

other named respondents, controlled, at all times hereinbefore named, the 
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futures trading of each and all of the respondents herein in said commodities, 

and controlled at said times the futures positions of each and all of the 

respondents herein in said commodities, on all contract markets. 

8. During the last five months of 1937, and during 1938, each and every one 

of the respondents named heroin, for part of said period, engaged as futures 

commission merchant in soliciting orders and accepting orders for the purchase 

and sale of the said commodities for future delivery and involving contracts of 

sale of said commodities for future delivery on and subject to the rules of 

contract markets, accepting money, securities, and property, and extending 

credit, in connection with such solicitation and acceptance of orders, without 

having registered with the Secretary of Agriculture as such futures commission 

merchant, and without segregating the funds of customers 

as required by the Commodity Exchange Act. 

9. One of the plans under which the respondents operated consisted of a 

respondent's entering into a "joint fund agreement" with a customer, whereunder 

such respondent was to add ten percent to the sum received from the customer, 

was to open and control a trading account in the above-described commodities and 

in other commodities and securities, was to receive forty percent of any profits 

from said account, and was to be liable for losses to the extent of its oneeleventh contribution. 

10. Various other plans and devices were employed by each of respondents, 

under each of which devices the respondent acted as a futures commission 

merchant and was subject to the terms of the Commodity Exchange Act and the 

rules and regulations thereunder. 

11. On or about July 7, 1938, S. W. Gongoll and the other respondents herein 

failed and refused to keep their books and records pertaining to futures 

transactions in said commodities open to inspection by representatives of the 

United States Department of Agriculture. 

CONCLUSIONS 

The record shows that S. W. Gongoll controlled the commodity futures trading 

of all of the respondents, that he violated the act and the rules and 

regulations by failing to report on many 

occasions when the volume of trading and the position controlled by him were of 

the size required to be reported, and by reporting falsely on other occasions, 

and that each respondent violated the act by engaging as futures commission 

merchant without registering as such and without segregating the funds of 

customers, and by failing to keep books and records pertaining to commodity 

futures transactions open to inspection by representatives of the Department of 

Agriculture. There being no registration as futures commission merchant to 

revoke, it is deemed that the violations and disregard of the act by each 

respondent make it necessary to deny each of the respondents all trading 

privileges on contract markets. 

ORDER 

IT IS HEREBY ORDERED that all contract markets, until further notice of the 

Secretary of Agriculture, refuse all trading privileges thereon to S. W. 

Gongoll, S. W. Gongoll doing business as S. W. Gongoll and Company and as Unit 

Plan Trading Company, General Equities, Incorporated, Financial Distributors, 

Incorporated, Financial Associates of Minnesota, Incorporated, Financial 

Associates of Florida, Incorporated, Financial Associates of South Dakota, 

Incorporated, and Financial Associates of Illinois, Incorporated, and each of 

them. 
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IT IS FURTHER ORDERED that a copy hereof be sent by registered mail to each 

respondent, and a copy to each contract market. 

(SEAL) 

IN WITNESS WHEREOF, the Secretary of Agriculture has hereunto set his hand 

and caused the official seal of the Department of Agriculture to be affixed 

hereto in the City of Washington, District of Columbia, on this 3rd day of 

November, 1938. 

/s/ Harry L. Brown 

Acting Secretary of Agriculture 

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