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Petitioner, as a participant in the Hunter gold futures
spread program, would have been required to sign the following
Hunter forms: (a) New Account Application; (b) Account Agreement
and Risk Disclosure; (c) Risk Disclosure Statement; and
(d) Current Policies and Fees, setting forth the commissions and
fees payable by petitioner to Hunter. Petitioner testified that
it was normal practice in his business to keep copies of signed
documents. However, at trial, petitioner could not provide
signed copies of any of the Hunter documents listed above.
Petitioner's initial commodity positions were created on
December 1, 1980, when he made the investment. Petitioner paid
an initial deposit of $178,500. Out of his initial deposit,
petitioner incurred the following costs:
Legal fee $3,500
Management fee 35,000
Commission to establish
initial spread positions 17,500
Total costs 56,000
Thus, petitioner's initial margin was $122,500 ($178,500 -
$56,000).
Petitioner's trades with Hunter were initiated by FAX, Inc.
(FAX), a registered trading adviser. In order for FAX to
initiate trades between petitioner and Hunter, petitioner would
have been required to sign both an "Investment Advisory Agree-
ment" and a "Special Power of Attorney" authorizing FAX to trade
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