Release:#3965-96

For Release:November 13, 1996

CFTC FILES THREE SEPARATE ADMINISTRATIVE COMPLAINTS RELATED TO GRAIN
    CONTRACTS, ALLEGING VIOLATIONS OF THE COMMODITY EXCHANGE ACT

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
    today the filing of three separate administrative complaints related to
    grain contracts that are alleged to have violated the Commodity Exchange
    Act (CEA).

In the first complaint, Southern Thumb Co-op, Inc., a cooperative
    grain elevator headquartered in Lapeer, Michigan, is charged with violating
    the prohibition against the offer of illegal, off-exchange agricultural
    options, and with fraud in connection with its marketing of the illegal
    instruments.

The second complaint charges Grain Land Cooperative of Blue
    Earth, Minnesota, with offering and entering into illegal, off-exchange
    futures contracts.

The third complaint charges Roger Wright of Mechanicsburg, Ohio,
    with fraud in connection with his marketing and promotion of, and his entry
    into, illegal, off-exchange futures and options contracts. Wright is also
    charged with registration violations. This complaint also charges A.G.
    Edwards and Sons Inc. of St. Louis, Missouri, and its employee, Philip Luxenburger, with aiding and abetting Wright's unregistered
    activities and with trading without proper authorization. The third
    complaint also charges Buckeye Countrymark Inc., a cooperative grain
    elevator located in Xenia, Ohio, with offering and entering into illegal,
    off-exchange futures and options contracts.

In the first CFTC complaint, Southern Thumb Co-op is alleged to have
    marketed illegal "short call option" and "long put option" programs to
    producers and to have recklessly misrepresented the risks associated with
    these options in violation of Section 4c(b) of the CEA, and CFTC
    regulations 32.2 and 33.10.

In the complaint against Grain Land Cooperative, the CFTC alleges that
    the elevator offered and sold so-called "hedge-to-arrive" contracts that
    constituted illegal, off-exchange futures contracts in violation of Section
    4(a) of the CEA. In the third complaint, Wright is charged under the CEA
    and CFTC regulations with acting as an unregistered commodity trading
    advisor and with fraud for his misrepresentations in promoting and
    marketing to farmers the illegal, off-exchange futures and options
    contracts offered by Buckeye Countrymark. Buckeye Countrymark is also
    charged with violating Sections 4(a) and 4c(b) of the CEA and CFTC
    regulation 32.2 for its offer and entry into illegal, off-exchange futures
    and options contracts.

The CFTC's complaints institute public administrative proceedings to
    determine if the allegations in the complaints are true and, if so, what
    sanctions should be imposed. Possible sanctions include cease and desist
    orders, civil monetary penalties, registration restrictions where
    appropriate, and, where fraud is alleged, restitution to customers.

The complaints are based on information presented by the CFTC's Division
    of Enforcement, which gives the CFTC reason to believe the respondents have
    violated the CEA and CFTC regulations as alleged. The filing of these
    complaints does not represent a determination by the CFTC that there has
    been a violation of the CEA, nor that any sanctions or other remedies are
    warranted. Any such determination will await the development of a record at
    a hearing convened before a CFTC administrative law judge, who will then
    make appropriate findings of fact and conclusions of law. Under the CFTC's
    Rules of Practice, the respondents are required to answer the charges in
    the respective complaints within 20 days of service. Thereafter, the
    administrative law judge will set a date for a hearing.

The CFTC recognizes that there is widespread use in the grain industry
    of various grain contracts, some of which are termed "hedge-to-arrive"
    contracts, or "options." The decision to bring these actions is based
    solely on the facts relating to the specific contracts involved in these
    three cases.

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