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Commodity Futures Trading Commission 

CEA CASES 

NAME: HENRY S. SICINSKI 

CITATION: 25 Agric. Dec. 302 

DOCKET NUMBER: 131 

DATE: MARCH 31, 1966 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 10,431) 

In re HENRY S. SICINSKI. CEA Docket No. 131. Decided March 31, 1966. 

False statements -- Fictitious transactions -- Breach of fiduciary duty to 

business trust -- Denial of trading privileges

Respondent's trading privileges on all the contract markets are denied for a 

period of 3 years for his violations of the act in deceiving a business trust by 

transmitting to it statements falsely showing the execution of transactions in 

futures. 

Mr. Earl L. Saunders for Commodity Exchange Authority. 

Respondent pro se.

Mr. John J. Curry, Referee. 

Decision by Thomas J. Flavin, Judicial Officer

DECISION AND ORDER

In this disciplinary proceeding under the Commodity Exchange Act (7 U.S.C. 

Chapter I) the respondent made no appearance at the hearing before the referee 

and filed no exceptions to the referee's recommended decision and order. The 

referee recommends that the respondent be found to have violated wilfully 

sections 4, 4b, 4c and 4h of the act (7 U.S.C. 6, 6b, 6c, 6h) in deceiving a 

business trust by transmitting to it statements falsely showing the execution of 

transactions in futures. 

Upon consideration of the record we adopt the referee's recommended decision 

and order as the final decision and order herein and the order is as follows: 

ORDER

Effective April 18, 1966, all contract markets shall refuse all trading 

privileges to Henry S. Sicinski for a period of three (3) years, such refusal to 

apply to all trading done and positions held by the said Henry S. Sicinski 

directly or indirectly whether for his own account or for the account of other 

persons directly or indirectly controlled by him. 

Copies hereof shall be served upon the parties and upon each contract market. 

REFEREE'S RECOMMENDED DECISION AND ORDER

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 

September 21, 1965, by the Assistant Secretary of Agriculture against Henry S. 

Sicinski, an individual. 
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The complaint alleges in substance that the respondent, while engaged in 

handling the trading in commodity futures of a business trust known as Commodity 

Trading Trust A, deceived such trust by transmitting to it statements falsely 

showing the execution of transactions in futures, and that the respondent 

transmitted certain of such statements through the mails. The complaint charges 

that, by reason of the facts stated therein, the respondent wilfully violated 

the prohibitions contained in sections 4, 4b, 4c, and 4h of the Commodity 

Exchange Act (7 U.S.C. 6, 6b, 6c, 6h). 

The respondent filed an answer to the complaint on October 11, 1965. In such 

answer, the respondent admits that he rendered untrue statements to Commodity 

Trading Trust A, but states that "[the] implication that this deception allowed 

the respondent profit at the expense of the trust members is not true" (emphasis 

supplied). By way of explaining his conduct in this respect, the respondent 

states in his answer that "[the] monies belonging to the trust had been lost in 

futures transactions" and that "he decided not to report the loss but rather 

wait until after attempting trading on the Chicago Board of Trade to determine 

if the money lost could be recovered." 

On November 2, 1965, the referee granted the respondent's request that the 

oral hearing be held in Chicago, Illinois instead of Ann Arbor, Michigan, as 

designated in the complaint. The oral hearing was held in Chicago on December 

1, 1965. John J. Curry, Office of Hearing Examiners, United States Department 

of Agriculture, was assigned as referee and presided at the hearing. Earl L. 

Saunders, Office of the General Counsel of the Department, appeared for the 

complainant. The respondent did not appear in person at the hearing and there 

was no appearance on his behalf. Immediately prior to the commencement of the 

hearing, the respondent informed the attorney for the complainant over the 

telephone that the respondent "stated in his answer everything he could say" and 

that he would not appear at the hearing (Tr. 3-4). No evidence was adduced on 

behalf of the respondent by deposition or otherwise. Three witnesses testified 

for the complainant and 13 

exhibits were received in evidence on behalf of the complainant. After the 

hearing, the complainant filed suggested findings of facts, conclusions, and 

order based upon the evidence adduced at the hearing. In view of that fact and 

the fact that no such document was filed by the respondent, the aforesaid 

findings of fact, conclusions, and order are adopted in this recommended 

decision. 

PROPOSED FINDINGS OF FACT

1. The respondent, Henry S. Sicinski, is an individual whose address is 790 

Barton Shore Drive, Ann Arbor, Michigan. At all times during the period between 

November 17, 1960, and November 27, 1963, the respondent was a member of the 

Chicago Open Board of Trade. At all times during the period between November 

12, 1963, and February 1, 1965, the respondent was a partner in the firm of 

Soltes & Company, a registered futures commission merchant under the Commodity 

Exchange Act with membership privileges on the Chicago Board of Trade (Comp. ex. 

9, 10, 11, 12; Tr. 28-30). 

2. The Chicago Board of Trade and the Chicago Open Board of Trade were at all 

times material herein boards of trade duly designated as contract markets under 

the Commodity Exchange Act. At all such times the commodities in which trading 

was conducted on the Chicago Board of Trade and the Chicago Open Board of Trade 

were regulated under the Commodity Exchange Act, and all contracts of sale for 

future delivery on such boards of trade could have been used for hedging 

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

transactions in interstate commerce, or for delivering commodities sold, shipped 

or received in interstate commerce (Respondent's answer, p. 1). 

3. At all times material herein, the respondent acted as the account manager 

of a business trust known as Commodity Trading Trust A, hereinafter referred to 

as the trust. In such capacity the respondent was authorized to make 
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transactions in commodity futures for the account of the trust and to direct and 

control the trading of the trust in commodity futures. As compensation for his 

services in such capacity, the respondent was entitled to share in the profits 

resulting from the trades which he made for the trust. On or about July 18, 

1963, the trust delivered approximately $ 45,500 to the respondent to margin and 

secure the trades of the trust (Comp. ex. 1; Tr. 6, 13-15, 20). 

4. During the period July 31, 1963, through on or about October 31, 1963, the 

respondent delivered to the trust four separate statements, each of which 

purported to show the execution of numerous transactions in futures on the 

Chicago Open Board of Trade for the account of the trust. Each such statement 

showed with respect to each transaction reported thereon, the date, commodity, 

quantity, future and price. The members of the trust accepted such statements 

as confirming that the transactions reported thereon had been made by the 

respondent for the trust. In truth and in fact, a substantial number of the 

purported transactions shown on each of these statements had not been executed 

(Comp. ex. 2, 3, 4, 13; Tr. 6-28, 33-36). 

5. On January 7, 1965, the respondent transmitted through the mails to the 

trust nine separate documents to confirm to the trust that transactions in 

futures on the Chicago Board of Trade had been made by the respondent for the 

trust. Each such document purported to be a statement of account rendered by a 

futures commission merchant showing the execution of numerous transactions in 

futures on the Chicago Board of Trade. Each such document showed with respect 

to each transaction reported thereon, the date, commodity, quantity, future and 

price. The members of the trust accepted such statements as confirming that the 

transactions reported thereon had been made by the respondent for the trust. In 

truth and in fact, no such transactions had been executed. The respondent 

merely fabricated the nine statements and mailed them to the trust in an effort 

to convince the members of the trust that the respondent had made the reported 

transactions for the trust (Comp. ex. 5, 6, 7, 8; Tr. 10, 15-16, 25-28). 

PROPOSED CONCLUSIONS

Section 4 of the Commodity Exchange Act (7 U.S.C. 6) declares it to be 

unlawful for "any person to deliver for transmission through the mails . . . any 

confirmation of the execution of, or any quotation or report of the price of, 

any contract of sale of any commodity for future delivery on or subject to the 

rules of any board of trade in the United States . . . except . . . where such 

contract is made by or through a member of a board of trade which has been 

designated by the Secretary of Agriculture as a 'contract market' . . ." 

Section 4b of the act (7 U.S.C. 6b) declares it to be unlawful "for any 

member of a contract market, or for any correspondent, 

agent, or employee of any member, in or in connection with any order to make, or 

the making of . . . any contract of sale of any commodity for future delivery 

made, or to be made . . . for or on behalf of any person . . . (B) wilfully to 

make or cause to be made to such person any false report or statement thereof . 

. . (C) wilfully to deceive or attempt to deceive such person by any means 

whatsoever in regard to any such order or contract or the disposition or 

execution of any such order or contract, or in regard to any act of agency 

performed with respect to such order or contract for such person." 

Section 4c of the act (7 U.S.C. 6c) declares it to be unlawful for any person 

to "confirm the execution of any transaction involving any commodity . . . (A) 

if such transaction . . . is a fictitious sale." 

Section 4h of the act (7 U.S.C. 6h) declares it to be unlawful for any 

person, in connection with the handling of any contract for the purchase or sale 

of any commodity for future delivery, falsely to represent that it has been 

executed on a contract market. 
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The complainant's suggested findings of fact are either admitted by the 

pleadings or plainly established by the evidence. These findings clearly 

demonstrate that the respondent: (1) transmitted through the mails confirmations 

of the execution of, and reports of the price of, contracts of sale of 

commodities for future delivery on or subject to the rules of a contract market, 

when, in fact, no such contracts had been made by or through a member of a board 

of trade which had been designated by the Secretary of Agriculture as a contract 

market, in wilful violation of section 4 of the Commodity Exchange Act; (2) made 

misleading and false reports and statements in connection with the making of 

contracts of sale of commodities for future delivery made or to be made on or 

subject to the rules of a contract market, and attempted to and did deceive a 

person in regard to such contracts and acts of agency performed with respect 

thereto, in wilful violation of section 4b of the act; (3) confirmed fictitious 

trades, in wilful violation of section 4c of the act; and (4) in connection with 

the respondent's handling of the commodity futures transactions of a person, 

falsely represented that the respondent had made transactions in futures on 

contract markets for such person, in wilful violation of section 4h of the act. 

Cf. In re Charles B. Grady, 8 Agric. Dec. 1241 (8 A.D. 1241) (1949); In re 

Garnac Grain Co., 8 Agric. Dec. 244 (8 A.D. 244) (1949); In re Alvis R. Davis, 8 

Agric. Dec. 669 (8 A.D. 669) (1949); In re Charles Vojtek, 7 Agric. Dec. 386 (7 

A.D. 386) (1948); In re Ray E. Stuart, 1 Agric. Dec. 359 (1 A.D. 359) (1942). 

The offenses by the respondent were deliberate, serious and flagrant. They 

violated basic provisions of the Commodity Exchange Act and involved breaches of 

fiduciary duty of an agent to his principal. When the respondent undertook to 

make transactions in commodity futures for Commodity Trading Trust A and to 

direct its trading, the relationship of the respondent to such trust became one 

of trust and confidence calling for a high degree of care, honesty and loyalty. 

In re Douglas Steen, 21 Agric. Dec. 1076 (21 A.D. 1076) (1962). Yet, the 

respondent demonstrated a deliberate disregard of his obligations in this 

respect. The statements which the respondent transmitted to Commodity Trading 

Trust A were falsified in a manner so blatant that his conduct in this regard 

can only be described as callous. The respondent's attempt in his answer to 

explain the offenses carries no weight in mitigation but, rather, demonstrates 

the gross impropriety of his conduct and the wilfulness with which he acted. It 

is manifest from the respondent's answer that he has no intention to change his 

conduct in the future. Upon a consideration of all the facts and circumstances 

of this case, we believe that in order to effectuate the purposes of the 

Commodity Exchange Act, the respondent should be denied all trading privileges 

on contract markets for a period of three years. 

The respondent is not registered as a floor broker or as a futures commission 

merchant and, therefore, it is not possible to suspend or revoke any license as 

a result of the respondent's violations. In order to have an effective sanction 

in this case, it is necessary to deny to the respondent all trading privileges 

for a specified period of time whether for respondent's own account or for the 

account of other persons directly or indirectly controlled by him. 

PROPOSED ORDER

Effective 20 days after receipt of this decision, all contract markets shall 

deny all trading privileges to Henry S. Sicinski for a period of three (3) 

years, such refusal to apply to all trading done and positions held by the said 

Henry S. Sicinski directly or indirectly whether for his own account or for the 

account of other persons directly or indirectly controlled by him. 

A copy of this decision and order shall be served upon the said Henry S. 

Sicinski and upon each contract market. 

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