CME Group Sued by Long-Time Members Over Exchange Changes

CME Group Inc., owner of the biggest futures market, was sued by shareholders who started with the exchange in the 1970s and claim operational changes to their trading rights have diluted the value of their memberships.

“This is a breach of contract action seeking hundreds of millions of dollars in damages,” they alleged in a complaint filed yesterday in Illinois state court in Chicago against CME and its Chicago Board of Trade unit.

Sheldon Langer and Ronald Yermack, who say they’ve been CME members since the 1970s, and Lance Goldberg, who claims he’s been a CBOT member since 2003, allege that they and their fellow old-line Class B members have lost free access and close proximity they formerly had to the CME’s Globex Electronic Trading platform, according to the complaint.

Since CME’s 2012 opening of an electronic data center in Aurora, Illinois, about 30 miles southwest of Chicago, the men and their peers have been required to pay for that access. The exchange has also started directly marketing Globex access rights, bypassing the members’ ability to lease those rights, according to their complaint.

Such changes required the approval of Class B members, which was never obtained by CME, the traders said. While CME’s market capitalization has increased since the Aurora facility opened, as has the value of Class A shares, Class B shares have not kept pace, they said.

Laurie Bischel, a spokeswoman for the Chicago-based CME Group, declined to comment on the complaint.

Money Damages

The CME members seek unspecified money damages for themselves and their peers, plus a court order allowing them, or their lessees, free access and better proximity to the Aurora facility.

In a separate case in the same courthouse, about 20 CBOT traders who still work in that exchange’s open-outcry pits are seeking an order reversing a change in final trade settlement pricing from one entirely depending on trading floor pricing to one incorporating electronic trade data.

The case is Langer v. CME Group Inc., 2014ch00829, Cook County, Illinois, Circuit Court, Chancery Division (Chicago).