Dear Fellow Members:
I am pleased to tell you that yesterday in U.S. District Court, Judge Wayne Andersen rendered a directed verdict in favor of the Chicago Board of Trade in the Ferruzzi soybean litigation matter. This is a tremendous victory for our exchange, and for those members who have been involved in this matter since 1989. On behalf of the membership, I want to thank Karsten Mahlman, Wally Weisenborn, and all of those members who have had to defend the actions they took in 1989 as elected leaders of your exchange and who have stood tall on behalf of the Chicago Board of Trade. I also want to thank Garrett Johnson, John Stassen and the other representatives of Kirkland & Ellis, our outside legal counsel, as well as Executive Vice President Carol Burke and her team for all their work in bringing this matter to a successful conclusion.
For nearly 155 years, the Chicago Board of Trade has gone to great lengths to preserve and strengthen the integrity of our markets and members, and this decision by the District Court vindicates the trust our customers place in these markets every day.
Ever since 1989 when our Board of Directors issued the emergency action in this matter, the Chicago Board of Trade has made it perfectly clear to all interested observers that our action was totally justified by Ferruzzi's behavior in the marketplace. The CBOT® and the Board acted to preserve the integrity of the markets on behalf of all market participants, and both the Commodity Futures Trading Commission as well as the General Accounting Office, the investigative agency of the U.S. Congress, agreed with our taking such action. I believe I can speak for all CBOT members when I say that I am pleased that Judge Andersen agreed with our action and with our rationale for such action, and we hope this brings an end to this issue once and for all.
In closing, I want to provide you with the following excerpt from Judge Andersen's statement in rendering his directed verdict:
"This case should not conclude without some observation with respect to the actions of the Chicago Board of Trade. As the facts in this case have unfolded, the court's personal conclusion has come to be that the Chicago Board of Trade, Mr. Mahlman, its directors and its staff, acted correctly. They had to invoke powers that had existed, but not been used… Had the Commodity Futures Trading Commission and Chicago Board of Trade stood by and done nothing - and that would have been the less difficult course and one compatible with their own belief in the integrity of free trade, and therefore, free markets - then damage, perhaps lasting damage, could have rippled through the entire agricultural world from the farmer through the elevator operators and processors, eventually to consumers."
Judge Andersen went on to say, "The Commodity Futures Trading Commission and the Chicago Board of Trade correctly exercised their legal powers to protect the larger interests."
Sincerely,
Nickolas J. Neubauer
