`TD Ameritrade v. Trading Technologies
`CBM2014-00133
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`plan for a new purely screen—based trading business. In 5 years, the firm became the
`largest proprietary interest rate trading company on exchanges in Germany, the UK. and
`the United States.
`I built the operation from a start—up to a team of over 175 traders with
`locations in Chicago, New York and London.
`I was responsible for both the strategic
`direction and the day—to-day management of all aspects of the proprietary electronic
`trading business.
`
`In late 2003, I left Goldenberg, Hehmeyer to set up Cheiron Trading LLC — a
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`proprietary electronic futures trading firm. Cheiron is located at 3 First National Plaza,
`14th Floor, Chicago, Illinois.
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`I first saw a beta version of what became TT’s MD Trader product sometime in
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`2000 at TT’s offices in Evanston, Illinois.
`I saw that this tool had potential and that it
`was different than the types of order entry tools being used for electronic trading at the
`time. In particular, MD Trader provided a static column of prices about which market
`data was displayed such that the market data moved relative to the prices. Visually, this
`provided the trader with an intuitive way to sense the direction and velocity of the
`market. Also, it allowed for very simple and accurate order entry.
`
`Goldenberg, Hehmeyer became a customer of TT’s MD Trader when it was
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`launched as a product. Once I started using the product, I saw that it was better than the
`preexisting order entry screens.
`In particular, it was faster in that by providing a more
`intuitive display, it reduced the time it takes for a trader to recognize opportunities. Also,
`it allowed for order entry with less errors than preexisting screens because a trader can
`quickly enter orders at particular price levels with absolute confidence that he will send
`an order at the intended price. This was so because there was no risk of the prices
`moving while the trader was attempting to enter an order. The product also had a one-
`click recentering feature that was valuable because it allowed the trader to quickly bring
`the display of the market to the center of the screen.
`I had never seen any of these
`features in preexisting electronic trading tools.
`
`The combination of the more intuitive display and the fast and reliable order entry
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`cause MD Trader to be a faster tool than preexisting systems. Speed is critical to the
`success of electronic traders. Anything that increases the speed in which a trader can
`send an order to an electronic exchange is very valuable.
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`MD Trader provided a significant change to the order entry screens that were
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`prevalent at the time of its release. Prior to the release of MD Trader, traders did not
`even perceive a problem with the old tools they were using. Only after seeing the
`benefits of MD Trader did people like myself realize the shortcomings of the preexisting
`systems. In fact, despite the benefits of MD Trader, when it was first launched as a
`product we had some difficulty convincing traders to switch over to MD Trader because
`they were so used to using the older style screens. Ultimately, though, these traders made
`the switch.
`
`0%?
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`After TT launched MD Trader, many competitors of TT released products that
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`had similar features, such as the static price, the improved order entry and the recentering
`features.
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`I declare under penalty of perjury that the foregoing is true and correct. Executed on July
`_——9
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`'
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`4W>4W
`
`Lawrence Schulman
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