TMCnet News

CME rival eyes Archipelago founder as chief
[February 09, 2008]

CME rival eyes Archipelago founder as chief

(Chicago Tribune (KRT) Via Thomson Dialog NewsEdge) Feb. 9--The upstart electronic futures exchange planning to face off against the CME Group is considering Archipelago founder Jerry Putnam for its chief executive, say people close to the discussions.

Putnam has been at the forefront of computerized trading for well over a decade and could be in the market for another opportunity after stepping down as vice chairman of NYSE Euronext in August.

A spokesman for the proposed exchange declined to say whether Putnam is a CEO candidate.

"We're talking to many experienced and highly qualified candidates, and we're going to be able to field a world-class management team," said spokesman Bill McBride. Putnam declined to comment.

A dozen major financial players, including Bank of America, Citigroup, Deutsche Bank, Merrill Lynch and Chicago-based hedge fund Citadel, are funding the exchange. It intends to begin trading in U.S. Treasury bond futures during the first quarter of 2008, an aggressive timetable given it has remained relatively quiet since announcing its existence in December.

The unnamed exchange also looked at Satish Nandapurkar to be CEO, but a source said he removed himself from consideration. Nandapurkar resigned as the CEO of the Chicago-based U.S. Futures Exchange late last month.

Putnam, 49, has experience in developing marketplaces out of scratch. He started Chicago-based Archipelago in 1996. The New York Stock Exchange acquired the electronic equities market in 2006, with Putnam becoming co-president and chief operating officer of the combined company and selling $21.6 million in stock days after the deal closed. The merger ushered the tradition-bound NYSE into the computer age, cutting the 12 seconds it took to manually complete a trade to the one-third of a second then needed on Archipelago's electronic platform.

The NYSE bought Paris-based Euronext last year for $14.3 billion, and Putnam left as vice chairman in August to become a senior adviser. Putnam had about $34.6 million worth of NYSE Euronext stock at the time of a June filing with the Securities and Exchange Commission.

The proposed exchange recently appeared to gain an advantage in competition with the CME Group, the parent company of the Chicago Mercantile Exchange and the Chicago Board of Trade.

The Justice Department, in reviewing previous attempts to launch futures exchanges, suggested that separating the exchanges from their clearinghouses would remove a significant barrier to entry, a conclusion that the proposed exchange said would level the playing field. But Assistant Atty. Gen. Thomas Barnett said Thursday that his department only encouraged the Treasury Department to study the issue, instead of taking any regulatory action.

In January, the proposed exchange lost its temporary CEO when Paul Saltzman resigned as chief operating officer of eSpeed Inc., the New York-based company controlled by trading firm Cantor Fitzgerald that is to have a 25 percent equity stake in the exchange and provide its electronic platform.

ESpeed gave Saltzman a 3-year, $2.1 million consulting contract and stock options as severance, according to public filings.


[email protected]

To see more of the Chicago Tribune, or to subscribe to the newspaper, go to

Copyright (c) 2008, Chicago Tribune
Distributed by McClatchy-Tribune Information Services.
For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

[ Back To's Homepage ]