CME Group CEO Craig Donohue provided a spirited defense of the CME clearing model that was recently questioned in a Department of Justice comment letter during a luncheon speech at the Managed Funds Association conference in Key Biscayne, Fla. Donohue called the comment letter “an ill-timed and ill-conceived suggestion,” and also pointed out that half of the positions of rogue trader Jerome Kerviel’s SocGen trades which resulted in the $7.2 billion loss were not subject to central party clearing and suggested that that helped make the fraud possible. Donohue said “the futures markets are a shining example of what could be right” with the clearing structure. John Damgard, president of the Futures Industry Association (FIA), who was also in attendance during the speech, said he thought it was surprising that Donohue would take aim at the investment banks, who are his biggest customers and substantial owners of the merc. submitted by Dan Collins
Tags: CME Group, Department of Justice, Futures Industry Association, Societe Generale
