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United States v. Grady.

decided: November 15, 1950.

UNITED STATES
v.
GRADY.



Author: Major

Before MAJOR, Chief Judge, and DUFFY and FINNEGAN, Circuit Judges.

MAJOR, Chief Judge.

Defendant was charged in an information containing nine counts, signed by the United States Attorney, with a violation of various sections of the Commodity Exchange Act, Title 7 U.S.C.A. ยงยง 6b(A) and (B) and 6d(2). Count 9 was dismissed by the government and ordered detached by the court. The case has twice been tried.On the first trial, a jury disagreed, and on a second trial (the instant case), a jury returned a verdict of guilty on all eight counts. Motions for a new trial and in arrest of judgment were denied. Thereupon judgment was entered on the verdict, from which the appeal comes to this court.

In the view which we take of the case, we need consider only a single ground relied upon for reversal, which makes it unnecessary to relate in detail either the allegations contained in the various counts of the information or the proof offered in support thereof. In substance, defendant, charged with being a registered future commission merchant, was alleged to have received funds from customers for the purpose of margining trades in commodity futures for the account of such customers and unlawfully defrauding them in connection with such transactions; with failing to treat and deal with the funds so received as belonging to such customers in accordance with the requirements of the Commodity Exchange Act; and with making false reports to such customers with respect to such transactions. The government presented the testimony of four customer witnesses who stated that they had placed specific sums of money totaling $25,225.00 with defendant, which money was to be used to margin transactions in commodity futures for their accounts. It was also shown by these witnesses that defendant informed them that transactions in commodity futures had been executed for them. The government also offered in evidence authenticated copies of Department of Agriculture records showing the Chicago Open Board of Trade as having been designated by the Secretary of Agriculture as a contract market under the Commodity Exchange Act. It was also shown by the Secretary of the Chicago Open Board of Trade that the defendant was a member of that organization.

This brief description of the nature of the charges, as well as the proof relied upon by the government, is pertinent only as a prelude to the matter which follows. There was attached to the information the following affidavit:

"Northern District of Illinois Eastern Division ss.

"George Livingston, being first duly sworn, on his oath deposes and says that the facts stated in the foregoing Criminal Information are true.

George Livingston

(Seal)

"Subscribed and Sworn to before me

this 6th day of October, A.D. 1948.

Roland C. Kumb

Dep. Clerk of the District Court of the United States for the Northern District of ...


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