Merc Orders Ethics Classes for Its Members

More than a year after allegations of fraud in Chicago futures markets, the Chicago Mercantile Exchange is ordering its 2,500 members to enlist in ethics classes.

The world’s second-largest futures exchange said any members who fail to take a class could face a stiff fine and possible suspension of trading privileges.

“We’ve been formulating this ethics program all along,” said Andrew Yemma, a spokesman for the exchange. “All the members are supposed to take it over a certain period of time.”

In a letter, the exchange said all members must register for one of 50 two-hour classes that will start April 30 and extend through year-end.

The ethics education program was proposed in April, 1989, by a special committee at the exchange formed to review trading practices.

The committee outlined sweeping changes to CME rules and procedures after an FBI probe in 1988 uncovered fraudulent trading practices at the CME and also at the Chicago Board of Trade, the world’s biggest futures exchange.

So far, 48 people have been indicted for illegal trading practices, including skimming thousands of dollars in customers’ profits and prearranged trades.

Classes will be held at a Kent College extension that is located across the street from the exchange.

A team of law professors from the college will present hypothetical cases simulating actual situations CME brokers and traders might encounter on the trading floor, Yemma said.

The exchange said it will assign a session to any member who fails to register by April 20.