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`l, James J. Zeilinger, declare that:
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`I am personally familiar with the facts set forth herein, and. if called as·a witness,
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`1 could and would testify thereto of my own personal knowledge.
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`I have over 40 years e~perience in the finanCial industry. I began my career as a
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`runner in the mailroom at the Chicago Board of Trade working for Merrill Lynch. I
`worked in various positions at Menill Lynch for 13-14 years. I left Merrill Lynch to be a
`partner and part-owner in Hennessy & Associates where I was involved in operations and
`sales. Hennessy was a clearing flrrn. I worked there for around 13·14 years. During my
`years at Merril1 and Hennessy I tr.aded through an order desk. When I left Hennessy, I
`traded for a while both from an office and on the floor of the CBOT.
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`In around 1990, I wa'S doing consulting work on the Globex project for the
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`Chicago Mercantile Exchange ("CME") when it was first being built. Globex was the
`CME's electronic trading platfonn. ln 1990-91, I took a job with the CME to run
`operations for Globex. I ran operations for Globex unti11994. In 1994, I returned to
`Merrill Lynch to run the commercial trading office. After working at Merrill for one and
`half years, !left to join Transmarket Group L.L.C., a clearing finn and a global private
`trading and investment company that trades various exchange listed derivatives, equities,
`commodities and cash markets electronically. At Transmarket, I created and ran one of
`the first electronic trading rooms for traders. I was also responsible for managing the
`clearing side of the business. When I first staned at Transmarket, a few traders were
`trading electronically on Project A. We had two Project A terminals. In 1995-1996, I
`built Transmarket's first electronic trading room. I continued to over~ee the expansion
`of Transmarket' s electronic trading until I left in November of 2000. During that time,
`the traders used a variety of different systems, including the Project A front-end, the
`Globex. front-end, Trading Technologies ("'IT") software, Ea~yScreen software and GL
`software. We also used Bspeed software to trade on Espeed's cash bond market. J was
`also aware of other front-end systems, including software offered by Patsystems. When I
`left, Transmarket had over 100 traders trading electronically.
`I first saw rr·s MD Trader in aronnd the fall of 2000. It became immediately
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`apparent that MD Trader was a superior trading tool to the other systems available at the
`time. The reason I know that MD Trader was superior was that the traders insisted they
`have it We licensed"TT's software to get MD Trader despite the fact that it was
`significantly m.ore expensive than the competition. I recall the CFO of Transmarket at
`the time objecting to our switch over to TT, but we had to make the switch because
`otherwjse we would lose our traders. In fact, we did lose one trader to another firm
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`TRADING TECH EXHIBIT 2046
`TD Ameritrade v. Trading Technologies
`CBM2014-00135
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`Page 1 of 3
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`because we were having som.e technical difficulty on our CME connection and were not
`a~le to get the TT software up and running quick enough.
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`At the time, the preexisting screens were not designed for an active trader. MD
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`Trader was the first application designed to be used as a true trading tool by the trader to
`enhance trading. The preexisting systems were order book type screens that were built so
`that a broker order desk could keep control of its orders and to limit errors. MD Trader
`was far superior for the active trader because it wa5 fast. It improved the way the trader
`saw the market. This was especially true for spreaders who would put multiple markets
`up side by side. MD Trader allowed tbe traders to easily see the movement of the market .
`because the market data was displayed dynamically relative to flx.ed price.'\ on the screen
`so that the data would move up and down on the screen. The preexisting screens
`displayed the best bid and best ask prices in designated locations on the screen (typically
`side by side) such that when the market changed the numbers in these locations changed.
`This required traders to read and mentally interpret changes in numbers to see changes in
`the market. At first, several of our traders demanded that they get MD Trader. Once they
`had it and other traders saw the benefits of MD Trader, it spread like wildfire.
`
`In November of 2000~ !left Transmarket to join Fuji Futures (a division of Fuji
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`Bank) where I was Ex.ecutive Vice Pre~ident of Operations. I was responsible for
`building a local business in Chicago for both floor and electronic trading. At the time,
`Fuji was providing GL software and exchange provided front-ends to its traders. A~ part
`of my goal of attracting professional traders to Fuji; I convinced Fuji to license 'IT's
`software in around March or April of 2001 . Fuji did thls because 'IT had MD Trader,
`which was unique at the time to TT. Fuji's professional tr.ade group chose TT over
`competitors such as RTS, GL, Patsystems and Basyscreen despite the fact that TT's
`software was more expensive. Puji became Mizuho Securities in April, 2002 and I
`continued on in the same role until June of 2003. I bad built the profe.qsional trading
`operation up to around 175 traders when I left. I left Mizuho to found (along with others)
`Advantage Futures LLC, a cleating finn on the CBOT, CME, LlFFE and Eurex for
`professional traders. I am President and COO of Advantage. Advantage currently has
`around 300 traders wi.th approximately 170 focusing on electronic trading. Our primary
`vendor for electronic trading is TT.
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`Jn the years following TI's release of MD Trader, many ISVs have released
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`products that have the same functionality as MD Trader. I have been in many meetings
`with representatives of competitive ISV11 trying to sell their trading software. Almost aU
`of these competitors, if not a11, has pitched their product as having a window that "looks
`just like', 'IT's MD Trader and as being cheaper than IT. These competitors needed to
`do this because the MD Trader tool was so important to active traders and provided a
`huge competitive advantage to TT. For example, I have heard these types of pitches from
`repre~entatives of RTS, Patsystems, GLand Easyscreen.
`
`Around 2 months ago I met With Steve Brocato. Mr. Brucato is a fonner
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`employee ofTT where he held the position of CfO. Mr. Brucato stated to me that be
`was Wot'king to help Bspeed develop a new front-·end that had similar features to 1Ts
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`Page 2 of 3
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`product. I also recall him telHng m.e that Espeed might offer its new front-end for free to
`people who were clearing cash bonds through Espeed.
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`It is my understanding that Harris Brumfield owned the rights to MD Trader
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`before TT released it as a commercial product. I have always been surpri!ied and 1 have
`spoken with others in the industry that have also been surprised that Mr. Brumfield
`permitted TT to tum MD Trader into a product and offer it to the world. The reason for
`my surprise and my understanding of others' surprise is that Mr. Brumfi.eld could have
`kept the technology behind MD Trader secret a.nd used to create a significant competitive
`advantage for himself in trading.
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`10. MD Trader also benefit~ the clearing firms and the exchanges in that it results in
`traders entering m.ore orders and, therefore, increases volume and liquidity.
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`l declare under penalty of peljury that the foregoing is
`August ...31_, 2004.
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