United States v. Clausen

792 F.2d 102 (8th Cir. 1986)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

D, a dentist, opened a trading account with Conti-Commodity Services, Inc. in 1982. After D had moved to Minneapolis, D called the Dallas office and placed a purchase order through his broker, William Thomas, for five contracts of silver futures. Clausen testified that he was experiencing severe financial difficulties at the time he placed the order and was hoping to make a profitable day trade, that is, to liquidate his position at the end of the day at a higher price. The price of silver fell throughout the day Thomas' assistant told Clausen that he would have to meet a margin call of $22,500. Clausen said he would bring in a check to the Conti office in Minneapolis on Monday. D brought a check for $22,500 to the Minneapolis office, knowing he did not have sufficient funds in his account to cover the check. D then called Thomas' assistant and placed another order for five contracts of silver futures. Clausen again speculated that the price of silver would rise so that he could liquidate his ten silver contracts at the end of the day and break even. The price of silver continued to fall, however, and Clausen was faced with another margin call of $31,900. D called Thomas and said that his $22,500 check would not clear and that he could not make the second margin call. Conti liquidated D's ten silver contracts, resulting in a loss of $47,883.00. D had $.66 in his checking account and approximately $63 in overdraft privileges on October 3, 1983. D was indicted on three counts of wire fraud based on three separate phone calls he allegedly made from Minneapolis to the Conti office in Dallas in furtherance of the allegedly fraudulent scheme. D was convicted on all three counts.