Malloy's Testimony in Solomon v. Atlantis on
the Subject of Potato Futures
and his Counterclaim of Slander for
Calling the Washington Post April, 1980
Found on Pages: 271-280, 320-326, 327-332, 374-379, 383
Malloy alleged that Solomon's truthful, private telephone discussion with Dan Morgan
regarding Morgan's article on the "Great Potato Futures Default of May 1976" caused
"brokers on the floor of the NYME to 'snicker' at him (Malloy)" resulting in damages
of at least $5,186,000.
At the time, Malloy oddly moved his trading of the specific potato futures contracts
from his employer E.F. Hutton to his friend Stephen Sundheimer,
the broker onvicted of manipulation in the
Great Potato Futures scandal.
Subjects:
Page 271
1 proceeded to explain to Mr. Morgan who Mr.
2 Solomon was, and why he might have been calling him.
3 Q. Now, to your knowledge, did Mr. Morgan speak with any
4 one else about this matter and about your possible
5 involvement in this matter, to your knowledge?
6 A. Yes, he did?
7 Q. To whom, other than --
8 MR. CHENEY: Your Honor, I will object to that because
9 again, it is a hearsay statement.
10 MR. RACHLIN: Your Honor, I have asked him whether he
knows.
11 THE COURT: We will take the answer.
12 MR. CHENEY: Well, the question was to whom he spoke;
that
13 calls for a hearsay response.
14 THE COURT: No, that question -- the answer would not be
15 hearsay. We will take the answer.
16 MR. CHENEY: To whom?
17 A. Mr. David Johnson, Head of Commodities of
18 E.F. Hutton and also the Chairman of the Board of
19 Governors of the Commodities Exchange of New York
20 and Mr. Stephen Green, which is a potato specialist
21 at E.F. Hutton.
22 Q. Had there ever been, in the history, if you know, in
23 the history of commodities trading, a default similar
24 or as large in scope as the potato scandal we have
25 been talking about?
Page 272
1 A. Never to my knowledge.
2 Q. Is that still one of a kind or have there been --
3 A. There has never been another default since.
4 Q. Now, you named certain people that, to your knowledge
5 Mr. Morgan spoke with.
6 A. Mr. Rachlin, if I can qualify it. There
7 probably have been what is called technical
8 defaults where people have several days to put
9 the commodity in place or something of that
10 nature. There has never been an outright
11 default when the person said they would not
12 deliver, had no intention to deliver and the
13 hell with the market.
14 Q. I understand. Getting back to the people, to your
15 knowledge, whom, to your knowledge, Mr. Morgan
16 spoke, did you yourself speak with any of those
17 people or did they speak with you?
18 A. May I have the question again?
19 Q. Let me rephrase.
20 You named some people who, to your knowledge, Mr.
21 Morgan spoke with?
22 A. Yes.
23 Q. Did any of those people speak to you?
24 A. Yes.
25 Q. About this matter?
Page 273
1 A. Yes.
2 Q. Which of them did?
3 A. Both.
4 Q. Both, I think you named three of them, didn't you?
5 A. No, David Johnson and a Stephen Green.
6 Q. I’m sorry, I misheard you then.
7 What was -.- the occupation of Mr. Green was the
8 President of the Board of Governors?
9 A. No, he was the specialist at E.F. Hutton
10 in potatoes. Mr. Johnson was the Head of the
11 Commodities Department, vice-president of the
12 E.F. Hutton and also Chairman of the Board of
13 Governors of the Commodities Exchange.
14 Q. That is where I became confused.
15 A. He had all three of those titles.
16 Q. What was the occasion when Mr. Johnson spoke to you
17 about it?
18 A. He called me in Newport as well and he
19 asked me that, I had gotten a call –
20 MR. CHENEY: Your Honor, I will object to the
conversation
21 of this witness of somebody named Johnson.
22 MR. RACHLIN: Again, Your Honor, these conversations
have to
23 do with the damage issue. We are not offering these
24 conversations as correctly stating in fact. We are
25 merely trying to show that the conversations took
Page 274
1 place in support or our claim of damages.
2 THE COURT: We will take the testimony.
3 A. Mr. Johnson called me. I had been his
4 personal assistant, second in charge of
E.F.
5 Hutton's Commodity Department until March of ‘75
6 at which time it was decided I would just trade
7 as a customer. I still maintained my own office
8 at E.F. Hutton, still went in most days when I was
9 in New York, and continued to trade through
E.F.
10 Hutton. We were still close, and he was
11 concerned about me as both a customer, as a
12 friend and as another person. I owned my own seats
13 on the exchange and he was the Chairman of the
14 Board or Governors or the Exchange. So he called
15 me and he said, Pat, what is going on? I just
16 got a call from the Washington Post about
17 potatoes. Are you involved?
18 And I said, no, I really just don't know
19 what is going on. I am not involved. I am going
20 to leave on a vacation; as soon as I get back
21 I will come see you and tell you all about it
22 but I have no involvement with the potato scandal.
23 I traded potatoes during that period of time
24 just like I traded every other commodity during
25 that period or time but I don't know the people
Page 275
1 involved, was not involved, and I did go to see
2 him afterwards and explained the entire thing.
3 And when I got back from the race, then
4 I knew more about why the calls were made and I
5 explained to him about Dennis Solomon and
6 what had happened.
7 Q. Now, the other gentleman --
8 A. Stephen Green, he was the potato specialist
9 He was called -- we went through pretty much the
10 same dissertation. I didn't feel I needed to go to
11 see Steve personally but I explained to him
12 over the phone and then, or course, the next time
13 I saw him at E.F. Hutton, I did, but I felt a
14 tremendous obligation to explain it to Mr.
15 Johnson.
16 Q. Were you confronted with any other people from time
17 to time who made reference to this?
18 A. Wall Street is a very, very small place even
19 though there is a large number of people who are
20 employed there. And when problems are created
21 such as the thing with Bunker Hunt recently or
22 with anybody, even on a small scale, the rumors
23 travel in Wall Street very quickly.
24 MR. CHENEY: Your Honor, the answer isn't responsive to
the
25 question. I know, I assume I have a particular line
Page 276
1 of objection to this line and if it is, I imagine the
2 evidence can come in. But I wish the witness would
3 be more responsive to the question.
4 MR. RACHLIN: I believe the rule is, Your Honor , that
only
5 the examining attorney has the right to object
6 solely on the grounds of unresponsive answer.
7 I believe that opposing counsel can object if
8 there is something else objectionable but if the
9 sole basis of the objection is unresponsiveness,
10 that is an objection reserved to the examining
11 attorney.
12 THE COURT: I think the witness was interrupted in his
13 answer. Do you have the question in mind?
14 Yes, I do, Your Honor.
15 THE COURT: Go ahead.
16 I returned, went to the floors of several
17 exchanges, and was immediately confronted with this
18 that was I, wasn't I, or jokes of yes, you
19 know, I hear you are involved in the potato
20 scandal, too.
21 How long did this kind of confrontation go on?
22 A. I am not really sure. For several days,
23 maybe as long as two weeks.
24
Did
you actually lose any money because of this.
25 A. No, I did not.
Page 277
1 Did you consider that these accusations were a
2 reflection, however, on the honesty and credibility
3 you talked about earlier?
4 A. Yes, I do.
5 MR. CHENEY: I object to that as leading, Your Honor.
6 THE COURT: All right.
7 MR. RACHLIN: I will withdraw it.
8 Q. Whether you consider the accusation or the suggestion
9 to be a reflection on your credibility and
10 honesty --
11 A. Yes, I do.
12 Q. -- did you at the time?
13 A. Yes, I did.
14 Q. Did this incident cause you any stress at the time?
15 A. Yes, it did.
16 Q. Did it cause you -- whether or not it caused you
17 any embarrassment at the time?
18 A. It caused me personal embarrassment that
19 I had to explain to all of my contemporaries
20 on the floor and never had to explain to anything
21 before and I never have since.
22 Q. Did you at any time in the preparation of this case
23 read Dennis Solomon's deposition?
24 A. Yes, I did.
25 Q. Do you happen to recall in general terms what his
Page 278
1 explanation was of how this business came about , what
2 he claims to have heard?
3 A. I am not really sure of the wording, just
4 that he said that he called Dan Morgan and that
5 that –
6 MR. CHENEY: Your Honor, we will object to that. Mr.
7 Solomon is here and he can be examined.
8 MR. Rachlin: I am using this only to introduce some
9 additional testimony, Your Honor. Let me see if
10 I can’t get it in a different way.
11 THE COURT. All right.
12 Q. Did you understand Mr. Solomon to have testified
13 about some conversation on a sailboat?
14 A. Yes, he did.
15 Q. Now, do you remember when that conversation
16 supposedly took place, on what occasion you were
17 on the sailboat?
18 A. In May of 1975.
19 Q. And this would have been at the time when you were
20 exp1oring or with the Atlantis people, the possibility
21 of making an investment in Atlantis?
22 A. That's correct.
23 Q. Was there some other individual on that boat that
24 Mr. Solomon testified you were conversing with?
25 A. Yes.
Page 279
1 Q. And what was that person's name?
2 A. Mr. Stephen Green
3 Q. That is the Stephen Green we spoke about a moment ago
4 A. That's correct.
5 Q. Did you at that time have any conversation with
6 Stephen Green about manipulating potato futures?
7 A. No.
8 Q. Did you have any discussion with him to your
9 recollection about potato futures?
10 A. I don’t recollect that we spoke about
11 potato futures. I would say it would be pretty
12 hard for us not to because that and sailing were
13 the two things we had in common.
14 Q.
He
was a potato specialist, wasn’t he?
15 That's right, he sat right beside me in E.F
16 Hutton.
17 Q. That's correct, you traded potatoes?
18 A. Yes.
19 Q. So you would discuss potatoes?
20 A. Yes.
21 Q. Were you in any way involved in the so-called Simplot
22 Scandal, manipulating potatoes?
23 A. No, I was not.
24 Q. Manipulating potato futures?
25 A. No, I was not.
Page 280
1 Q. Now, in May, as you have testified, there was a
2 time when you were exploring the possibility of
3 an investment in Atlantis and there has already been
4 testimony and we don't need to bore the Court by
5 going over this for the 15th time, but you did in
6 fact make an investment?
7 A. Yes.
8 Q. Was it your intention when you made that investment
9 to become an active participant in the day-to-day
10 operations of Atlantis?
11 A. No. In fact, I made it clear to them
12 that I was going to be an absentee stockholder.
13 My main business was trading commodities on
14 Wall Street and I could not play an active
15 part in the day-to-day running of the business.
----------------------------------------
Page 320
1 It is Stephen?
2 A. Stephen Sundheimer, yes, I am.
3 Q He is associated with a trading firm known as
4 Pressner Trading Company?
5 A. Yes, he is.
6 And you traded with Pressner Trading Company yourself
7 A. Yes, I have traded with them.
8 Q. And specifically, you traded
with Pressner Trading
9 Company in March, April and May or 1976?
10 A. No.
11 Q. You didn’t. You traded --
12 A. I'm sorry, Mr. Cheney, can you give me the
13 months?
14 Q. March, April and May of 1976?
15 A. That would have been after I left E.F.
16 Hutton; from the date that I left E.F. Hutton
17 I did trade with Pressner Trading. Up until
18 that date, trades were made through E.F. Hutton
19 and Pressner Trading did the floor brokerage.
20 But your accounts were carried with Pressner Trading
21 Company?
22 A. Yes.
23 Q. And Pressner Trading Company wag indicted in the
24 Simplot scandal, wasn’t it?
25 A. I don't know if their firm was. Mr. Sun-
Page 321
1
heimer was.
2 Q. Sundheimer was.
3 MR. RACHLIN: Your Honor, I would inquire, given the
present
4 state of. the proceedings, whether Mr. Cheney now
5 proposes to interpose the defense or truth to the
6 count of. slander?: If he does, I have no objection
7 whatever of his amending his complaint to do 80 but
8 I think if that is his intention, he ought to do it
9 openly arid not by innuendo.
10 MR. CHENEY: I think the pleadings speak for themselves.
11 There is a defense of truth but that is why this is
12 offered at the moment.
13 MR. RACHLIN: If it is not offered for that purpose, I
would
14 ask for what purpose it is offered? I have no
15 way of. knowing what the question would be until I
16 heard the answer.
17 MR. CHENEY: It is offered to show that this 'man
18 with a company that was under indictment or at least
19 investigation by the Commodities futures Trading
20 Commission, relating to the Simplot scandal.
21 MR. RACHLIN: Your Honor, it is really necessary to cite
22 authority for the proposition that the fact that
23 he traded with the company that was under indictment
24 has absolutely no bearing on anything? Otherwise
25 we could all be guilty of something, at one time or
Page 322
1 another.
2 MR. CHENEY: He has testified he got a call from some
3 reporter from the Washington Post probing into the
4 potato default. And I would suppose an alert
5 reporter would check who traded with companies that
6 were under indictment.
7 MR. RACHLIN: Your Honor, I would like to know if. this
8 company was ever convicted. I don't know that an
9 indictment has anything to do with anything, even
10 if --
11 MR. CHENEY: I don't know that conversations with news
12 reporters have anything to do with anything. I can
13 ask him any question I want to ask.
14 THE COURT: At the moment there is no question that I
think
15 has been asked.
16 MR. RACHLIN: That is my fault, Your Honor. In my zeal
to
17 make my point, I forgot to make any 'notion, which is
18 to strike the last question and answer because, if
19 course, I had no way of knowing what was coming out
20 until the question was asked. That is what I should
21 have prefaced my argument with. And I so move.
22 THE COURT: We will deny the motion.
23 MR. RACHLIN: Very good, Your Honor.
24 What was the extent of your trading with the Pressner
25 Trading Corporation?
Page 323
1 A. I don't understand what you mean by extent
2 of my trading.
3 Q. Well, did you trade relatively large amounts of
4 potato futures with the Pressner Trading Company
5 during the spring of 1976?
6 A. No.
7 Q. You traded all your potatoes through that corporation
8 though, didn't you?
9 A. Yes, I did.
10 (The Court Reporter marked Plaintiff's Exhibit
11 No. 8.00 and Plaintiff's Exhibit Mo. 8.01.)
12 I am going to show you this exhibit, Plaintiff's
13 8.00, and ask you if you can identify what is
14 contained in those packet of papers?
15 A. They are the trading transactions of my
16 account with Pressner Trading.
17 Now, the default that you mentioned in your testimony
18 occurred when, exactly?
19 A. I believe it was in May of '76.
20 Q. And this indicates -- well, you did trade through
21 Pressner in May and prior to that time?
22 A. Yes, I did.
23 Does it show the amount of positions you had with
24 Pressner?
25 A. This is the position on that date.
How many did you have.?
Page 324
1 A. I had 40 contracts.
2 What was the approximate value?
3 A. It was a carload and the carload would be
4 hundredweight so a hundredweight or -- I think
5 you would have to multiply this price per pound
6 times a thousand.
7 Q. So what is the figure?
8 A. So that would be 13,000 times 40.
9 Q. 13,000 times 40 --
10 A. Right.
11 -- would be the value of your positions?
12 A. That's correct.
13 That is on what date?
14 A. That was on March
24th.
15 And these other positions are --
16 A. Those are the purchases that is the
17 position.
18 So you had a total of 40 on that date?
19 A. Yes.
20 Q. March 26th, you had 20 positions?
21 A. Yes.
22 Q. March 29th, you had 50 positions?
23 A. No, I had 40. This is the long side of
24 ten. This is the short side of 50) so I ended up
25 having a net position of 40.
Page 325
1 March 30th?
2 A. Twenty.
3
Q. April 13th?
4 A. The position went to a short position of
5 70.
6 April 19th?
7 A. I think that they were all bought back and
8 they probably had no position in there.
9 Q. Doesn't that reflect 70?
10 A. I think that that is the purchase of these
11 and this, you have two different types of
12 statements here. One is a statement for a
13 period of time, one is the acknowledgment in
14 doing the trading. This is the acknowledgment
15 of doing the trade. So this is the others
16 of that transaction(indicating).
17 April 29th, what was your trading position?
18 A. I was long, 30 at that time.
19 And again, you multiply 30
20 A. Times the price, which was now down to
21 $10,000) 50 it would be 10,000 times 30.
22 $30,000?
23 A. Right.
24 By the way, would a $30,000 position, you say that
25 would not be a significant position in the potato
Page 326
1 market?
2
A. The potato market trades 20 to 30,000
3 contracts a day. I believe at that time, 30
4 contracts would just be absolutely nothing. You
5 can do that in two seconds.
6 And now we are into July, I guess. On say 4th, you
7 had 30?
8 A. No. On May 4th, I had zero. This is the
9 sale of 30. I had 30 long before. My current
10 position was zero.
11 Q. But you do recollect that the Pressner Trading
12 Company bad been charged with violations of the
13 Commodities Act?
14 A. At sometime I found that out.
15 Q. All right, have you ever seen Plaintiff's 8.01 before
16 A. I don't believe so.
17 Do you know what it is from looking at it?
18 A. I assume that it is the indictment. It is
19 the complaint or notice of hearing in the
20 Commodities Exchange -- no, I am not sure what
21 it is. It says it is not New York Commodity
22 Exchange or New York Mercantile Exchange.
23 And Pressner is named as a defendant in that
24 complaint, isn't it?
25 A. I would really have to read the whole thing.
Page 327
1 I have never seen it before.
2 Well, you did have knowledge that Pressner -- that
3 proceedings had been brought against Pressner and
4 others by the Commodities Trading Commission?
5 A. I did not know that Pressner traded in
6 those.
7 Q. You did not know that before today?
8 A. No.
9 Q. You knew that Stephen Sundheimer had been, however?
10 A. Yes.
11 Q. And you had worked closely with him at E.F. Hutton?
12 A. NO, I wouldn’t say that.
13 W2ell, you both were employed by E.F. Hutton at
14 the same time?
15 A. No, we were not.
16 You never overlapped?
17 A. No.
18
Q. Well, you placed orders through Sundheimer?
19 A. Pardon?
20 Did you place orders through him as a broker?
21 A. Not until I left E.F. Hutton.
22 Q. Well, but that is a period of time which
23 potato scandal took place, isn't it?
24 A. The scandal happened after the default was
25 made. The default was made on the last day of
Page 328
1 trading which I believe was the tenth of May.
2 Q. All right.
3 A. Nobody knew there was a scandal until
4 after that happened.
5 Q. But the default certainly, as you testified caused
6 consternation on Wall Street?
7 A. Yes, it did.
8 And you had just stopped trading with Hutton prior
9 to that default, hadn't you?
10 A. No.
11 Q. Strike that. You were no longer employed by Hutton
12 at that time?
13 A. As a registered representative, correct.
14 Q. And you had traded with Pressner at the period of
15 time just before the default?
16 A. May I have the question again?
17 (The Court Reporter read back the pending
18 question: And you had traded with Pressner at
19 the period of time just before the default?)
20 A. Yes.
21 Now1 did this individual identifying himself as
22 Morgan say that he had written and investigated
23 about the potato default? That is two questions in
24 one, let me strike it.
25 You had a conversation you say with somebody
Page 329
1 identifying himself as a reporter from the Washington
2 Post?
3 A. Correct.
4 Q. And you had been interviewed in the past by
5 reporters that wanted to know technical items
6 concerning the market?
7 A. Yes.
8 Q. And do you know whether or not Morgan had written
9 articles on the so-called Simplot scandal?
10 A. No, I do not.
11 Q. You don't know that?
12 A. No.
13 Q. Did he tell you that he was interested in that subject
14 A. Yes.
15 Q. You don't know where his interests came from?
16 A. His interests in me or the interest in the
17 potato scandal?
18 The interest in the potato scandal?
19 A. No, I don't know where his interest in the
20 potato scandal came from.
21 Q. Now, you testified that at some point at the end of
22 your conversation with Morgan, the name Dennis
23 Solomon came up?
24 A. Yes
25 And you told him who Dennis Solomon was?
Page 330
1 A. Yes.
2 Q. The Dennis Solomon who is sitting here in thi8
3 courtroom?
4 A. Yes.
5 Q. That you had had some unpleasantness with him over
6 the Atlantis matter?
7 A. Yes.
8 Q. And you described to him all the events that led to
9 you taking over the company?
10 A. I don’t know if I described all the events.
11 Well, in general, you described that there was -~
12 A1 I described the situation which may have
13 led to him calling Morgan.
14 Q. And after that, you had no further inquiries on this
15 subject?
16 A. After that last conver5ation, no, none
17 from Morgan.
18 Q. None from Morgan. But no governmental agency ever
19 conducted an investigation of you, did it?
20 A. No, they did not.
21 And you said that you made some explanation to
22 Q. David Johnson about what had taken place?
23 A. Yes.
24 Q. And after that explanation, he held you in the
25 highest esteem, didn't he, continued to hold you in
Page 331
1 highest esteem?
2 A. I believe he did.
3 Q. Well, you have admitted that in your request to admit
4 in this case, haven't you?
5 A. No, you showed me a letter that said that
6 to you.
7 Q. All right, but also in your pleadings, you have
8 admitted that Mr. Johnson continues to hold you in
9 the highest esteem?
10 A. I believe he does.
11 Stephen Green was a personal friend or yours?
12 A. Yes.
13 In fact, Mr. Green was the individual that was
14 sailing on your boat in May as you have described?
15 A. Yes.
16 You were teaching his son, I guess, to sail?
17 A. His daughter.
18 Q. You didn't have any lowering or your reputation
19 with Mr. Green, did you?
20 A. No, I don’t believe so.
21 So there was no injury with respect to your
22 reputation with that individual?
23 A. No, sir.
24 Q. And I think you said there was some jokes or something
25 on Wall Street about the Washington Post calling you?
Page 332
1 A. No, what was said by several of the
2 floor brokers, I believe was, we hear that you
3 are involved in the potato scandal, too.
4 Q. Well, I was a little confused about your testimony
5 but I think it was that you knew that Morgan had
6 talked to two individuals, Green and Johnson?
7 A. Yes.
8 Q. Right?
9 A. Correct.
10 Q. So you don't know that Morgan talked with any other
11 individual?
12 A. No, I do not.
13 And you don't know, for example, whether Green might
14 have said something to your associates on Wall
15 Street about phone conversations from Morgan?
16 A. No, I do not.
17
So in fact, you have no knowledge as to how those
18 individuals gained any knowledge of this incident
19 at all, do you, the individuals on the brokerage, I
20 mean now?
21 A. No, I do not.
22 THE COURT: I think we will stop at this point and we
will
23 resume tomorrow morning at 9:30 a.m.
24 (where upon, the proceedings adjourned at 4:00 p.m.)
25
Page 374
1 $2 million?
2 A. No.
3 Q. Now, I would like to ask you a couple of questions
4 about potato futures since we got on that subject
5 earlier, I did and then Mr. Cheney did.
6 Mr. Cheney went over your trading record and at
7 that time you testified that you had certain position
8 at various times in potato futures?
9 A. That's correct.
10 Do you recall that?
11 A. Yes.
12
And what was the maximum position if you remember
13 that you ever had at that time?
14 A. I am not sure. I believe it was 70
15 contracts was the highest position I ever had.
16 during that period.
17 And at that period or time, what was the approximate
18 daily volume in potato futures on that market?
19 A. I believe it was somewhere between 15 and
20 25,000 contracts a day.
21 Did 70 contracts constitute in any sense a corner
22 on the potato market?
23 A. No, sir.
24 Was 70 contracts a reportable position?
25 A. Yes, it was. Only if it were in one month.
Page 375
1 Q. If it was in one month?
2 A. If it were spread over a number of months,
3 I don’t believe it was reported.
4 Q. Was your position reportable?
5 A. When I had 70, yes.
6 And did you report it?
7 A. Yes.
8 Q. Did you default on any contracts?
9 A. No,, sir.
10 Q. Do you remember whether you made or lost money in
11 potatoes during that period, if you recall?
12 A. I believe I lost slightly.
13 Lost slightly?
14 A. Yes.
15 At the time you were making those trades of potatoes,
16 did you have any knowledge that a: major default
17 was in the works in potato futures?
18 A. No, sir.
19 And with respect to the alleged indictment, may I
20 have it -- whatever it was you showed him, that you
21 claimed as an indictment?
22 MR. CHENEY: I never showed him any indictment.
23 MR. RACHLIN: I heard the word indictment.
24 MR. CHENEY: There was testimony that Simplot and
Taggares
25 were indicted.
Page 376
1 MR. RACHLIN: As I recall, there was reference to
Pressner
2 being indicted and at that time, a piece or paper
3 was shown to Mr. Malloy; in fact, I have the number
4 on it, if Mr. Cheney has forgotten which one I mean.
5 It is 8.01, if I could have that?
6 Now, Mr. Malloy, I believe yesterday a document
7 marked Q.0l was shown to you?
8 A. Yes, sir.
9 Q. Did you have an opportunity to read that by any chance
10 A. No, no, I did not.
11 It is entitled, "In the Matter of New York Mercantile
12 Exchange," is it not?
13 A. Yes.
14 And many, many people and firms are named or referred
15 to at least, in that, are they not?
16 A. I didn’t have a chance to read to the
17 page that I was shown. It shows six or seven of
18 the largest commodity brokerage houses.
19 As you look through it, just glancing, can you not
20 see the names of many people?
21 A. Yes. The8e are six out of maybe the ten
22 major commodity brokerage houses.
23 Q1 And before he took the paper away, Mr. Cheney showed
24 you the name of -- it says here, Pressner Trading
25 Corporation, apparently Pressner, it should be or
Page 377
1 is it Pressner?
2 A. It is Pressner.
3 Q. Okay, Pressner Trading Corporation which you did
4 business with is named in this in some respect?
5 A. Yes.
6 I also notice Thompson and McKinnon is named in that
7 same sentence, is it not?
8 A. Yes.
9 Q. Thompson and McKinnon is ft well-known national
10 brokerage house?
11 A. Yes.
12 I probably should disclose that I have done business
13 with Thompson-McKinnon. Heinold Commodities is one
14 of the largest in the c6untry, are they not?
15 A. That's correct
16 Do you know, have you ever heard or Hornblover and
17 Weeks-Hemphill, Noyes?
18 A. Yes.
19 Are they a rather?' well-known firm?
20 A. Yes, they are.
21 They are also named in here?
22 'A. Yes.
23 Do you know whether E.F. Hutton, who everybody
24 listens to, was also involved in this investigation?
25 A. I know that they were called in to testify.
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1 I don't know whether they are in this document.
2 What is MPX Commodities?
3 A. I am not familiar with them.
4 Q. That you don't know. Do you know what the upshot
5 of this investigation was by the Commodity
6 Futures Trading Commission?
7 A. I believe so.
8 What is your knowledge on that?
9 A. That there was a default by some individual
10 in Idaho, that they had accounts with various
11 brokerage houses. They did default on the
12 potato oontracts, and that they were later
13 taken to court and convicted.
14 There are also in this document names of certain
15 individuals, are there not) and I will draw your
16 attention to one or two here, John B. Simplot
17 is mentioned?
18 A. Yes.
19 Peter 0. Taggares?
20 A. That's correct.
21 There is a reference here to Casper Meyerson?
22 A. Yes.
23 Harold Collins?
24 A. Yes.
25 Q. You might glance through this and tell me whether you
Page 379
1 name appears anywhere in that document.
2 A. I really haven't read it because I have
3 never been served or questioned in any aspect of
4 this case.
5 MR. CHENEY: Your Honor, we certainly made no claim that
6 Mr. Malloy ha. ever been charged or complained against
7 by the CPTC.
8 MR. RACHLIN: We realize no allegation has been made. We
9 think that is quite beside the point.
10 Q. Just take a quick look through there and tell us
11 if your name appears in there?
12 A. No, it does not.
13 Q. I don't believe Plaintiff's 8.01 has ever been offered.
14 THE COURT: That’s correct.
15 MR. RACHLIN: We would like to offer it as
Defendant’s A9 and
16 perhaps the Reporter will mark that.
17 (The Court Reporter marked Defendant's Exhibit A.)
18 MR. CHENEY: I have no objection, Your Honor.
19 THE COURT: It may be admitted.
20 MR. RACHLIN: That is all I have for the moment.
21 Further Recross Examination b KIMBERLY CHENEY, Esquire:
22 Q. Mr. Malloy, are you, would you say, well-known as
23 a trader on the Commodities Exchange?
24 Well, let me put it this way: Have articles
25 been written about you) on your trading in the Exchange
Page 383
1 road.
2 MR. CHENEY: Well, at this point, I don't make that
claim,
3 Your Honor.
4 THE COURT: That was the Court’s understanding.
5 MR. RACHLIN: In that event, we have no objection.
6 MR. CHENEY: In fact, I think I am through.
7
Q. You have been written about frequently, though, in
8 the newspapers, the New York Times?
9 A. I have been written about frequently.
10 Well, more than once?
11 A. More than once, yes.
12 Three or four times?
13 A. Yes.
14 Q. In financial magazines you have also been the subject
15 of some commentary?
16 A. I would include in that in the four and
17 five times.
18 Now, those would be things like what, Baron1s?
19 A. Yes.
20 And Forbes?
21 A. No.
22 Never been written about in Forbes?
23 A. No, not to my knowledge.
24 You yourself have written some articles, haven't you?
25 No, I have not.