I am trying to understand a scene in Trading Places (1983 film).

After Randolph and Mortimer Duke failed to corner the frozen concentrated orange juice (FCOJ) futures market, the following conversation occurs: https://www.youtube.com/watch?v=RLySXTIBS3c&t=337s

  • Exchange official #1: Margin call, gentlemen.
  • Mortimer Duke: Why, you can't expect us to ...
  • Exchange official #2: You know the rules of the exchange, Mr. Duke! All accounts are to be settled at the end of the day's trading, without exception.
  • Randolph Duke: You know perfectly well we don't have three hundred and ninety four million dollars in cash!
  • Exchange official #3: I'm sorry, boys. Put the Duke brothers' seats on the exchange up for sale at once, seize all assets of Duke & Duke Commodities Brokers, as well as all personal holdings of Randolph and Mortimer Duke.

Is it actually possible for commodity futures exchanges to seize the assets of its member firms, as well as the personal assets of the firm's owners?

  • 2
    Wealthy people and banks can collateralize almost anything :)
    – Matthew
    Jun 12, 2021 at 4:06

1 Answer 1


This question is sort of answered in the podcast (and worth a listen): NPR Planet Money Episode 471: The Eddie Murphy Rule (July 9, 2013).

From the transcript:

[Host] SMITH: And this dramatic, crazy, clearly Hollywood ending - the bad guys lose everything, they get booted out of their rich positions in the market - this really happens sometimes, according to Tom. He says people would borrow money, bet it all on a market move, and when it went the opposite direction they had to pay up.

[Guest] PERONIS: Most clearing houses had people who were referred to as leg breakers. You know, not - they weren't like real mobster, you know, leg breakers. But they were the ones who would say, all right, you know, time to pony up. All right, well, you know, we want your house. We want your IRA.

SMITH: It would happen right there on the floor?

PERONIS: That's a little overdramatized, but it would happen that day or the next day. You know, there wouldn't be much of a time lag.

For a moment, I thought that guest was mistaken as I though that IRAs are sheltered from bankruptcy, but that protection only came about due to The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, way after the movie was released.

The Duke & Duke probably operated as a General Partnership where Randolph and Mortimer Duke could be personally held liable for the debts of the firm.

  • The last sentence is the first thing I thought of when reading the question (and is a key benefit of corporations).
    – RonJohn
    Jun 12, 2021 at 15:10
  • @RonJohn Corporations have reporting requirements, while the Duke & Duke seems to act more like a modern day hedge fund where the brothers can operate as they see fit (and out of the public eye). Jun 12, 2021 at 15:28
  • 1
    All corporations. or just publicly traded corporations? (Because not much is known about private corporations.) The real down-side of corporations at the time -- since I don't think S Corporations were a thing at the time -- was double taxation.
    – RonJohn
    Jun 12, 2021 at 15:33
  • @RonJohn Point taken for private vs public corporation disclosure. In my mind, Randolph and Mortimer seem like they would want to avoid paying any additional tax just to run the family business. Jun 12, 2021 at 16:04

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