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Commodity Futures Trading Commission 

CEA CASES 

NAME: MILLER-LANE & CO., AND GEORGE C. LANE 

CITATION: 29 Agric. Dec. 679 

DOCKET NUMBER: 171 

DATE: JUNE 16, 1970 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 13,225) 

In re MILLER-LANE & Co., and GEORGE C. LANE. CEA Docket No. 171. Decided June 

16, 1970. 

Financial requirements -- Customers' funds -- Records -- Cease and desist -- 

Stipulation

Respondents consented to the issuance of an order requiring them to cease and 

desist from failing to segregate customers' funds, failing to prepare daily 

records of funds which must be in segregated account, and failing to meet 

prescribed minimum financial requirements. 

Earl L. Saunders for Commodity Exchange Authority. 

Schultz, Hennessy & McGrath, Chicago, Ill., for respondents. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is an administrative proceeding under the Commodity Exchange Act (7 

U.S.C., Chapter 1, 1964 ed., as amended, Supp. IV, 1969), instituted by a 

complaint and notice of hearing issued on April 24, 1970, under section 6(c) of 

the Act (7 U.S.C. Supp. 

IV, 13b). The respondents are charged with violating sections 4d, 4f and 4g of 

the Act (7 U.S.C. Supp. IV, 6d, 6f and 6g), and sections 1.10, 1.17 (34 F.R. 

599), 1.20, 1.21, 1.22, 1.23, 1.32 and 1.35 of the regulations thereunder (17 

CFR 1.20, 1.21, 1.22, 1.23, 1.32 and 1.35). 

No hearing has been held in this proceeding. On June 12, 1970, the 

respondents filed a stipulation under section 0.4(b) of the rules of practice 

(17 CFR 0.4(b) in which they (1) withdraw their answer previously filed, (2) 

admit the facts hereinafter set forth in paragraphs 1 and 2 of the Findings of 

Fact, (3) admit, for the purposes of this proceeding and for such purposes only, 

the facts hereinafter set forth in paragraphs 3 through 5 of the Findings of 

Fact, (4) waive the report of the Hearing Examiner, and (5) consent to the entry 

of the order contained herein. 

FINDINGS OF FACT

1. Respondent Miller-Lane & Co., an Illinois corporation with its principal 

offices at 343 South Dearborn Street, Chicago, Illinois 60604, is now, and was 

at all times when it is mentioned herein, a registered futures commission 

merchant under the Commodity Exchange Act, with membership privileges on the 

Chicago Open Board of Trade, a duly designated contract market under the 

Commodity Exchange Act. 
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2. Respondent George C. Lane, an individual whose business address is the 

same as that of the respondent corporation, is now, and was at all times 

material herein, the president of the respondent corporation. At all such 

times, the operations of the respondent corporation were under the direction and 

control of respondent George C. Lane. 

3. a. At the times hereinafter stated, the respondent corporation, in the 

regular course of its business as futures commission merchant, carried accounts 

of customers who traded in commodity futures on contract markets subject to the 

provisions of the Commodity Exchange Act and regulations. Such accounts, the 

trading therein, and the handling and disposition of funds in connection 

therewith, were subject to the provisions of the said act and regulations. At 

all such times, the respondent corporation had to its credit with banks or other 

depositories sums of money in varying amounts, held in segregated accounts and 

identified as customers' funds, representing deposits of margin by and trading 

profits accruing to such customers. 

b. On September 30, 1969, the respondent corporation was undersegregated in 

the amount of $ 18,887.60 -- that is, the total amount of customers' funds held 

in segregation as above described, was insufficient, by the aforesaid sum, to 

pay all credits and equities due to such customers. 

c. On the daily segregation record that was prepared and kept by the 

respondent corporation to meet the requirements of the regulations issued under 

the Commodity Exchange Act, the said respondent showed that on September 30, 

1969, it had excess funds in segregation in the amount of $ 5,047.19, whereas, 

in truth and in fact, it was undersegregated as specified above. 

d. On each business day between January 15 and January 23, 1970, both 

inclusive, the respondent corporation was undersegregated in amounts ranging 

from $ 4,553.58 on January 16 to $ 6,606.99 on January 20 -- that is, the total 

amount of customers' funds held in segregation as above described, was 

insufficient, by the aforesaid sums, to pay all credits and equities due to such 

customers. 

4. As of September 30, 1969, the respondent corporation, while engaged in 

business as a registered futures commission merchant under the Commodity 

Exchange Act, failed to meet the minimum financial requirements prescribed by 

section 1.17 of the regulations (34 F.R. 599) issued by the Secretary of 

Agriculture under the said act. Examination of the respondent corporation's 

books and records by the Commodity Exchange Authority as of September 30, 1969, 

revealed a deficiency in adjusted working capital of $ 17,671.21, when computed 

in accordance with the above-cited section of the regulations. The analysis is 

as follows: 

Unadjusted Working Capital Current Assets $ 168,975.31

 Current Liabilities 127,027.49

 Unadjusted Working Capital 41,947.82

Adjusted Working Capital 

 Total charges against 

 Unadjusted Working Capital 356.44

 Adjusted Working Capital 41,591.38

Minimum Adjusted Working Capital Required 59,262.59

Deficiency in Adjusted Working 

 Capital 17,671.21

5. During the period from August 1 through September 30, 1969, the respondent 

corporation failed to prepare and maintain 

a monthly computation of its net worth, as required by section 1.10 of the 

regulations issued under the Commodity Exchange Act (34 F.R. 599). Prior to 

September 30, 1969, examination of the books and records of Roberts, Lane & Co., 
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a predecessor firm to the corporate respondent, by the Commodity Exchange 

Authority as of March 28, 1969, disclosed that the said firm was not preparing 

and maintaining such a computation and this failure was called to the attention 

of the firm in writing on August 20, 1969, and to the attention of respondent 

George C. Lane in a letter dated August 25, 1969. 

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 sections 4d, 4f and 

4g of the Commodity Exchange Act and sections 1.10, 1.17, 1.20, 1.21, 1.22, 

1.23, 1.32 and 1.35 of the regulations thereunder. 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

Respondent Miller-Lane & Co. shall cease and desist from: (1) failing to 

treat and deal with customers' funds as belonging to such customers as required 

by section 4d of the Commodity Exchange Act (7 U.S.C. 6d, Supp. IV, 1969) and 

the regulations thereunder; (2) failing to hold customers' funds in segregated 

accounts as required by section 4d of the Commodity Exchange Act (7 U.S.C. 6d, 

Supp. IV, 1969) and the regulations thereunder; (3) failing to prepare and 

maintain (a) an accurate record as of the close of the market on each business 

day of the amount of money, securities and property which must be in segregated 

account in order to comply with the requirements of section 4d of the Commodity 

Exchange Act (7 U.S.C. 6d, Supp. IV, 1969) and the regulations thereunder, (b) a 

monthly computation of its net worth as required by section 1.10 of the 

regulations (34 F.R. 599), and (c) such other books and records relating to 

dealing 

in commodity futures in such form and manner and for such period as may be 

required by the Secretary of Agriculture; and (4) engaging as futures commission 

merchant within the meaning of the Commodity Exchange Act without meeting the 

minimum financial requirements prescribed by section 1.17 of the regulations (34 

F.R. 599) issued under the Commodity Exchange Act. 

Respondent George C. Lane shall cease and desist from wilfully causing, 

aiding, counseling, commanding or inducing respondent Miller-Lane & Co., or any 

other futures commission merchant, to engage in any act or practice from which 

the said respondent corporation is directed to cease and desist by this order. 

This order shall become effective on the date of service of a copy thereof 

upon respondents. 

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