Bad-boy trader booted by Merc

Discussion in 'Wall St. News' started by chartie, Sep 29, 2005.

  1. chartie


    Bad-boy trader booted by Merc, fined $50,000

    September 28, 2005
    BY DAVID ROEDER Business Reporter

    The Chicago Mercantile Exchange said Tuesday it fined Lewis Borsellino, one of its most combative characters, $50,000 and ordered him to sell his membership for allegedly trying to avoid making good on several losing trades.

    The action means Borsellino, 48, won't be swinging his fists on the trading floors anytime soon. He was known for getting into scrapes with others in the pits and his track record at the Merc includes several minor infractions, mostly along the lines of "conduct that impairs the dignity'' of the exchange.

    In 1999, Borsellino published a book about his career titled The Day Trader: From the Pits to the PC. It actually contained little about day trading and more about his pugilism and the challenges he faced growing up as the son of Tony Borsellino, a reputed mob hit man who himself was assassinated.

    Duked it out for prime space

    The trader's tales of winning slugfests to gain coveted standing areas in the pits irritated Merc bosses, who were intent on burnishing the image of futures trading in preparation for making the exchange a public company.

    In its decision posted Tuesday, the Merc said Borsellino tried to avoid responsibility for several trades in 2001 and 2003 and impeded an arbitration that eventually led to restitution. In ordering him to sell his membership, the Merc barred him from reapplying for three years.

    Borsellino, who agreed to the findings without admitting wrongdoing, said the decision won't crimp his style much. He said he's been retired from futures trading for two years and won't come back. He now spends time developing retirement communities Downstate.

    Also, Borsellino is pursuing a lawsuit against Gerald Putnam, chief executive of the Chicago-based Archipelago stock exchange, which is being absorbed into the New York Stock Exchange. Borsellino accused Putnam of cheating him out of an interest in the business that became Archipelago.

    He's claimed that he used to account for 10 percent of daily volumes in the S&P futures pits. But that business has migrated from open-outcry pits to computers.

    Borsellino admitted he's not fond of the transition.

    "I don't even look at the markets anymore," he said. "I've done it for so long, I'm done. And there's no volatility.''

    Asked if the penalties were the Merc's payback for past actions, Borsellino said, "I don't know what motivates the individuals in the compliance department. It is a source of revenue now and it has a big budget.''

    A Merc spokesman declined to discuss the case, following the policy for disciplinary announcements.

    Borsellino remarked that the old Wild West-image of trading is obsolete and mused about the day when the Merc builds a display to show what open-outcry was like.

    "I'm sure they'll make me a dummy in the wax museum,'' he said.
  2. stay strong, baby.

    "impedes the dignity of the exchange." lets decode this, shall we?

    "reminds us of what we really are?"
    "conduct that could piss off shareholders now that we're public?"
    "conduct our lawyers told us we had better separate ourselves from, fast, lest anyone find out where we buried the bodies?"
  3. Choad


    Not sure what that means. Did he signal for a trade, then deny it when it instantly went against him?

    It's funny. Futures trading, and trading in general, is always depicted in movies as being so high-class. Expensive suits and Bentleys.

    But it has always seemed very blue-collar to me. Expecially those guys dukeing it out in the pits.
  4. jim c

    jim c

    Thats exactly what he did. He would wait until it went to arbitration then make good on it or pay the fine the day of arbitration. The guy doesnt have alot of friends down there. The 50k is on top of alot of other fines he still owes. With his latest wife being filthy rich i dont think he'll ever go back. Jim
  5. LOL.. GO BORSE!!!!

    They'll make him a wax dummy.. ROFL.

  6. don't worry.
    john gotti jr is out of jail and is coming to the pit.
  7. Welching on a trade is the worst thing you can do on the floor.
  8. I saw that show Growing up Gotti. The grandsons look like they are unprepared to do any actual work, so trading might be good for them. They can pretend to do something during the day without the demands that real employment would bring. Its a kind of job which is quasi professional and has some of the prestige of running your own business.
  9. would that it were so.
  10. Saw one of the largest traders at the CEC on the COMEX floor in the silver pit try and run some stops once and "reneg" on a 200 lot order that was being executed by a "Rocky" Stallone type floor broker that worked for Preston Semel. The floor broker nearly took his head off!

    This was back in 1986.
    The pit trader's first name was Mark.

    #10     Sep 29, 2005