MF Global Fight Unites Onetime Rivals |

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    Emily Lambert, Forbes Staff

    Chicago and New York futures traders have had a prickly relationship over the years. Despite mergers that put the cities’ futures exchanges under the same corporate roof, it’s not hard to get a trader or broker in one city to privately criticize the ethics and morals of their counterpart in the other city.

    But that has changed since MF Global collapsed on Oct. 31. Now futures traders in both cities have a common enemy in former MF Global chief Jon Corzine, and a common purpose to recover money they had in MF Global accounts.

    “This event has unified traders all over the world, and members of every exchange,” says David Rosen, a 32-year-old energy broker who works on the floor of the Nymex, and who has partnered with Chicago traders to fight for MF Global customers’ money.

    Jon Corzine is leaving a surprising legacy. In addition to bankrolling the world’s only statue of Abraham Lincoln and a pig, he has inspired peace talks in the often cliquey camps of onetime rivals. Corporate mergers started chipping away at longstanding trading rivalries and made a big dent when three exchanges (the Chicago Board of Trade, the Chicago Mercantile Exchange, and the New York Mercantile Exchange) merged into CME Group. Since then, social media sites like Twitter and Stocktwits have many traders chatting as if on one big virtual trading floor. But the fight for customer funds has unified traders on a new level as it has morphed into a fight for the safety and integrity of the futures business.

    As traders and customers reacted to the MF Global bankruptcy, they initially formed separate groups. On November 7, one week after MF Global declared bankruptcy on Oct. 31, 80 exchange members in New York held a meeting and decided to hire a law firm to represent them.

    Around the same time, a group of Chicago traders got together and founded a group they called the Commodity Customer Coalition. James Koutoulas, the 30-year-old chief executive of Typhon Capital Management, a commodity trading advisor and pool operator, emerged as its mouthpiece. He worked closely with John Roe, a principal at the futures broker BTR Trading Group.

    The two groups met at a bankruptcy hearing, where Rosen introduced himself to Koutoulas and exchanged contact information. Koutoulas mentioned he planned to attend hearings about MF Global in Washington D.C. They ended up traveling there together and sharing a hotel room.

    Rosen, in his sixth year on the trading floor of the Nymex, says he knew little about Chicago traders and says that after meeting Koutoulas and Roe, “I knew right away these guys are for real and that we needed to have a unified front.” Koutoulas and Roe, for their part, said they had no feelings of rivalry. “A dirtball trader is a dirtball trader,” says Roe, who worked on the CME Group’s trading floor, in the Eurodollar pit, from 2003 to 2005.

    They discovered they had separate strengths. Rosen has relationships on the trading floor and can talk easily with veteran floor traders including CME Group Chairman Terry Duffy. He also worked at the white-shoe law firm Sullivan & Cromwell before he joined the futures world so is fluent in legalese. Roe, whose father is Congressman Phil Roe (R.-Tenn.), had connections in Washington. Koutoulas, meanwhile, preached inclusion and was open to new people and even culinary experiences. “I gotta tell you, David Rosen took me to Katz’s deli, and it was delicious,” he says of the famous Jewish deli on New York’s Lower East Side.

    In late December, Rosen decided to encourage his group’s members to support the Commodity Customer Coalition. The New York group ended its relationship with the law firm it had hired, although Rosen says the firm did a great job. “We’re all on the same team,” says Koutoulas.

    Many small groups of traders still have their own lawyers. Some have filed lawsuits, including CME Group Vice Chairman Charlie Carey, who is a co-plaintiff on a class-action suit filed against Corzine and other former MF Global executives. The Commodity Customer Coalition is focused on the goings-on in bankruptcy court. Koutoulas has also launched a boycott of JPMorgan Chase.

    Koutoulas says he has Twitter followers in more than 50 countries. In a radio interview last week, he even suggested that Occupy Wall Street organizers take a closer look at a disastrous JP Morgan bond deal in Jefferson County, Alabama. He’s not joining forces with protestors, however. “We want to engage anyone to the extent they have an interest aligned with customers.”