Chicago | Reuters — Veteran traders from Chicago’s grain pits on Tuesday dropped a lawsuit against CME Group that sought to reverse a change to end-of-day settlement rules they said was killing open-outcry business.
The traders, who work on the Chicago Board of Trade’s 140-year-old agricultural trading floor, agreed to abandon their claims against the world’s largest futures exchange operator without receiving any payment, CME Group said in a statement.
The traders sued CME Group, owner of the CBOT, in June 2012, claiming a decision to factor electronic trades into settlement prices would put them out of business and was implemented without proper approval from exchange members.
Prior to the change, the CBOT had a century-old tradition of settling futures prices for crops like corn and soybeans based on transactions executed in open-outcry pits.
The traders agreed to dismiss the case in light of an Illinois judge’s refusal in March to suspend the use of electronic trades in settlement procedures, their lawyer George Sang said in an interview.
The traders wanted to avoid the stress and expense of pursuing the matter, he added, noting each side will pay its own legal bills.
“My clients made a business decision that it was in their best interests to dismiss the case at this time,” Sang said.
The lawsuit was seen by traders as something of a last stand by open-outcry traders, as business has declined sharply since the rise of electronic trading. The floor traders traditionally did much of their business at the close of trading and said the new settlement procedures made the pits largely irrelevant.
Chicago-based CME Group called the dismissal of the lawsuit a decisive victory for the company.
“It is unfortunate that the plaintiffs wasted so much of their own time and money, not to mention that of the court and CME, chasing these baseless claims,” CME said in its statement.
— Tom Polansek reports on agriculture and ag markets for Reuters from Chicago.