Page 1 of 71
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`TRADING TECH EXHIBIT 2223
`IBG ET AL. v. TRADING TECH
`CBM2015-00182
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`CONHDENWAL
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`Page 2 of 71
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`DECLARATION OF PACE BEATTIE
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`I, Pace Beattie, declare that:
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`I am personally familiar with the facts set forth herein, and, if called as a
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`witness, I could and would testify thereto of my own personal knowledge.
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`I have over 20 years experience in futures trading and in the development and
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`training of traders. I am currently.Managing Director of foreign currency
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`trading at Kingstree Trading L.L.C., where I have worked for fourteen (14)
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`months. Prior to being the Managing Director of foreign currency trading, I
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`was involved with trader development.
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`From 1983 to 2000 I traded 30 year bond futures on the floor of the Chicago
`Board of Trade.
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`For approximately three (3) months in 2000, I traded electronically at the
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`trading firm, Goldenberg Hehmeyer.
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`From the time I left Goldenberg Hehmeyer until I joined Kingstree in 2003, I
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`was the business development director for Tekom, Inc. Tekom was an
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`information technology consulting company that designed, set up and support
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`electronic networks for traders in the futures industry.
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`I believe that I first saw 'I'T’s MD Trader product while I was working at
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`Tekom. All of Tekom‘s clients were trading firms, so I would see traders
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`trading with the product frequently. I also talked to traders and other
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`independent software vendors (lSV’s) in the futures industry frequently.
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`When I was at Tekom, ‘IT was known as the fastest trading screen, but it was
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`not until I began working at Kingstree that I realized the importance of the
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`static price column in the MD Trader screen. The genius in MD Trader is that
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`when the market moves, the price column does not. So, when a trader intends
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`to enter an order at a certain price, he is assured to enter it at his desired price.
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`Other trading screens may allow a trader to enter orders by clicking on a price
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`in an order entry screen, but the prices may change as the market moves,
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`which means a trader might enter an order at a price he did not intend.
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`As the markets rise and fall, the MD Trader screen displays the markets rising
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`and falling graphically. This visual demonstration of the market is a helpful
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`tool for traders to see market movement while trading. Often traders trade
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`Page 3 of 71
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`Page 3 of 71
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`multiple products simultaneously and set up multiple MD Trader windows
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`side-by-side on their desktop computer screen. MD Trader’s demonstration of
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`the market movement on multiple products also helps traders to visualize the
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`entire market easily and fast.
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`The centering feature of the MD Trader product also benefits traders by giving
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`them a point of reference to evaluate whether and how much a market has
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`moved. If the market moves off the screen a trader can re-center the point of
`reference with one-click.
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`The centering feature is also important when the market moves rapidly such
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`that it may move off of a trader’s screen. This happens often when an
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`economic indicator number is announced. The re-centering feature allows the
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`uaders.t¢di
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`which is an important advantage.
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`I heard a very successful trader say that traders do not trade markets, they
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`trade applications. I believe the MD Trader product is a very important and
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`helpful application for trading.
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`I feel that if a trader had the MD Trader product for his own trading and it was
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`not widely distributed to the trading community, he would have had a
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`significant advantage over other traders using other screens because of the
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`significant advantages 1 have described in this declaration.
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`I declare und
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`penalty of perjury that the foregoing is true and correct. Executed on
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`Pace Beattie
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`CONFIDENTIAL
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`DECLARATION OF THOMAS BURNS
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`1, Thomas Burns, declare that:
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`1.
`I am personally familiar with the facts set forth herein, and, if called as a witness,
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`I could and would testify thereto of my own personal knowledge.
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`2.
`I hold a Bachelor of Science degree in Mathematics and Computer Science from
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`Northern Illinois University.
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`I have traded securities and derivatives since 1994. Form 1994 to 2000 I traded
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`securities on a part time basis. Form 2000-2002 I traded stocks as my primary source of
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`income using Nasdaq Level 2 electronic trading screens and related charting tools. For
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`approximately the last year and a half I have traded futures electronically with a trading
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`group called Darwin Capital. I trade 2, 5, and 10 year treasury note futures, all of which
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`are listed by the Chicago Board of Trade. I also trade cash treasury notes and bonds,
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`which are listed for electronic trading on ESpeed. I use the electronic trading screen
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`offered by ESpeed to trade such cash treasury products.
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`4.
`Both the Nasdaq Level 2 and ESpeed trading screens display the prices and
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`quantities in the market using a simple grid display. Prior to seeing TT’s MD Trader
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`product, Ithought these trading screens were great and were the best way to trade
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`electronically. I thought they were fast and that they satisfied all of my trading needs.
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`I became familiar with TT’s MD Trader product when I first started trading
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`futures products electronically at Darwin Capital. Although it took me about a week to
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`get used to the MD Trader product and all of its useful features were not immediately
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`obvious to me, I did quickly notice that there was a world of difference between the way
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`MD Trader displayed the market and the way I had ever seen it displayed previously.
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`One of the most significant benefits that MD Trader offered was that it displayed
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`the ebbs and flows of a market in a way that I could easily see as I traded. It is very
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`helpful to my trading to know where the market is moving and where it has been and the
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`MD Trader product visually showed such movement as though it was a picture on the
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`screen.
`I could also see the high and low traded prices visually and intuitively using the
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`MD Trader product. The difference between MD Trader and the other screens I had used
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`was like night and day.
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`Another important feature of the MD Trader product was the order entry feature,
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`which allowed me to enter orders with a single click of the mouse at the price where I
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`wanted to enter an order. This processwas much faster than any order entry system I had
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`CONFIDENTIAL
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`Entering an order at a price displayed on the MD Trader screen was especially
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`beneficial and different from what I had seen before. The prices did not move, unless I
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`chose to center them on my screen, so I was always guaranteed to enter an order at the
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`price I wanted. This feature was important because I was never at risk to enter an order
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`at a position other than where I wanted to be.
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`The re-centering feature of the MD Trader product was also an important feature.
`9.
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`With one click I could re-center the MD Trader window on my computer screen. This
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`allowed me to keep a reference point from which I could gauge the movement in the
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`market. I could re—center the reference point whenever I chose. This helped me to
`visualize the movement in the market.
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`If I had traded with MD Trader when I traded securities, 1 would have traded a
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`much greater volume of trades.
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`11.
`MD Trader users have a significant advantage over traders that do not use MD
`Trader for all of the reasons set forth in this declaration.
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`I declare under penalty of perjury that the foregoing is true and correct. Executed on
`August \ SE , 2004.
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`mas Burns
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`Page 6 of 71
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`DECLARATION OF RAY CAHNMAN
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`1, Ray Cahnman, declare that:
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`1.
`I am personally familiar with the facts set forth herein, and, if called as a witness,
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`I could and would testify thereto of my own personal knowledge.
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`I have a Bachelor of Science degree in Mathematics from DePaul University and
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`a Master of Business Administration degree from Tulane University.
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`3.
`I began my trading career at the Chicago Board of Trade (“CBOT") in October of
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`1975.
`In 1980, I founded Aardvark Financial, a CBOT clearing firm. Aardvark Financial
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`became a clearing member of the Chicago Mercantile Exchange (“CME”) in 1981. The
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`firm was renamed Tra.nsMarket Group in 1984.
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`Transmarket Group L.L.C. is a global private trading and investment company
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`that trades various exchange listed derivatives, equities, commodities and cash markets
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`electronically. As electronic, screen based trading emerged, Transmarket became an
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`early leader in making use of technology trade electr'0nically. Transmarket currently has
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`around 150 traders, trading from different locations around the world. Transmarket's
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`headquarters are located at 141 W. Jackson, Suite 1930. Chicago, Illinois.
`I am currently
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`Chairman of Transmarket Group.
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`5.
`I qualified as an independent floor trader on the London International Futures
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`Exchange (“LIFFE”) and the Sydney Futures Exchange in 1989. From 1999-2002,]
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`served as Director of the Chicago Board of Trade. 1 have, therefore, witnessed and
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`experienced first-hand the transition from trading on the floors in an open outcry system
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`to the trading of products electronically via screens connected to electronic exchanges.
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`I currently trade cash U.S. Treasuries, Treasury futures, Eurodollar futures,
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`Euribor futures and Eurex yield curve products electronically. I have traded
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`electronically on the CBOT, CME, LIFFE, BrolcerTec, E-speed and Eurex.
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`I first became exposed to Ham's Brumfield’s idea behind MD Trader in the Spring
`7.
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`of 2000. I remember being shown a trading screen in which market depth was displayed
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`relative to a fixed or static column of prices and in which the trader could quickly and
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`accurately enter orders by clicking on cells associated with the prices. Irecall being
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`anything I had ever seen before. The MD Trader screen was significant departure from
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`the standard order entry screens that were prevalent at the time - screens that displayed
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`8.
`I started using TT’s MD Trader right around the time that TT launched it as a
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`product. Once I started using the product, I knew that this was a great idea. The product
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`proved to be a huge improvement over the trading tools that existed at the time. The
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`static nature of the prices allowed the trader to see the movements in the market depth
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`much easier through a more intuitive screen. This allowed a trader to recognize
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`opportunities much quicker. Also, MD Trader provided for the ability to quickly enter
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`orders at various price levels without the possibility of error because there was no risk of
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`the prices changing while the trader was attempting to enter an order with the mouse.
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`The one-click recentering feature of MD Trader was also very valuable because it
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`allowed the trader to quickly bring the display of the market to the center of the screen. I
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`had never seen any of these features in preexisting electronic trading tools.
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`9.
`Because of the more intuitive trading screen and the improved fast and reliable
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`order entry and management, the MD Trader screen allows for traders to react much
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`more quickly to fast changing market conditions than the preexisting systems. Speed is a
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`critical issue for electronic traders. Anything that allows a trader to decrease the time it
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`takes to recognize an opportunity and send an order to the exchange is invaluable. One
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`of the most impressive things about MD Trader is the fact that prior to its release traders
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`did not even perceive a problem with the old tools they were using. It was not until
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`seeing the benefits of MD Trader, did they realized the shortcomings of the old order
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`10.
`After 'IT launched MD Trader, many competitors of "IT released screens that
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`duplicated the static price, the improved order entry and the recentering features of MD
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`Trader. In fact, most independent software vendors (“ISVs”) have come out with a copy
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`of the MD Trader screen. These competitors needed to do this because potential
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`customers, such as myself, told them that 'I'I"s MD Trader screen was far superior from
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`their traditional order book type screens. In fact, I told representatives from competitors
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`of TT, including Patsystems and Eccoware, that they should not even bother trying to
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`pitch me their systems until they put a screen like MD Trader into their product.
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`11.
`At the time of the MD Trader launch, I recall being surprised that Harris
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`Brumfield permitted TI‘ to launch MD Trader as a product as opposed to keeping the
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`technology for himself.
`I believe that it is likely that if Harris Brumfield had not decided
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`to permit TI‘ to put MD Trader out there, we would still be using traditional order book
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`type screens today as the standard way of doing order entry.
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`I declare under penalty of perjury that the foregoing is true and correct. Executed on July
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`Z 3 , 2004.
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`DECLARATION OF DAVID CLARK
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`1, David Clark, 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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`I could and would testify thereto of my own personal knowledge.
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`My office is at 141 W. Jackson, Chicago, Illinois.
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`3.
`I have been trading futures for over 10 years. From 1994-1998, I traded for
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`Transmarket Group L.L.C., a private trading and investment company. When I first
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`started, I was trading fixtures on the 2 year treasury notes on the floor at the Chicago
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`Board of Trade (“CBOT”).
`I began using Project A to trade electronically in the
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`afternoons shortly afier it first came out sometime in 1998. Project A was the first
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`electronic trading system provided by the CBOT.
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`4.
`In 1998, I began trading independently. In the fall of 2000, I started trading
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`electronically using TT software and, in particular, TT’s MD Trader product. I continue
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`to use TT’s MD Trader product to trade electronically today. At the time I decided to
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`license TT’s sofiware, I was aware of the Project A front-end and sofrware offered by
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`Yes Trader. I choose TT and MD Trader because it was far superior to these other front-
`ends.
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`MD Trader was superior because it simplified order entry and sped up the process
`5.
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`of trading. By allowing a trader to enter orders with one click at fixed price levels with
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`no risk of the prices changing, MD Trader eliminated steps required by the other trading
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`systems at the time. This allowed traders to enter orders quicker and with more
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`confidence. MD Trader also provided a more efficient graphical representation of the
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`market than the other trading systems at the time by displaying the market information
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`relative to a fixed range ofprices such that the market moved up and down on the screen.
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`This allowed a trader to recognize market movement with much less mental effort than
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`required by the other systems at the time. This was so because the other systems required
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`the trader to focus on numbers and mentally recognize and calculate differences in those
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`Speed is everything in electronic trading. Anything that allows an electronic
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`trader to act quicker or make decisions faster is invaluable. MD Trader does just that by
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`allowing a trader to move at a faster pace and enter orders quicker than the other systems
`that were available at the time it was first released.
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`I declare under penalty ofperjury that the foregoing is true and correct. Executed on July
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`7:" 30 2004.
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`Q./Zgz
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`David Clark
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`Message
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`Harris Brumfield (TT)
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`From:
`Sent:
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`Durkln, Daniel (GED) [dan_durkin@ml.com]
`Friday, May 28, 2004 3:57 PM
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`Harris Brumfield (TT)
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`Subject: RE: Memory Recall!
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`To:
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`Harris,
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`I stopped by your office on Clark
`I do remember, I think it was the spring of 2000, late March or early April.
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`Street with Michael Burns to check out your setup. You had a couple of big screens TV's set up as your trading
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`screens. You showed us your custom trading screen and I was immediately struck by the novel way the market
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`prices were displayed and how easy it was to enter orders. At flrst I couldn't even understand what I was looking
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`at but you did a few 25 lot e—mini trades as we were standing there and I figured out the layout and the "half a
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`click" order entry.
`I remember thinking that half a click is as fast as you can trade.
`I decided right then and there
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`that I wanted what we were looking at on my desktop ASAP! You told us that you had created the customized
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`trading interface working with ‘IT and you had been so happy with the results that you were steadily increasing
`your investment in the companym,
`(TT).
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`Since that time there have been many imitations presented to me as "just as good as TT", ( I think
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`YESTRADER was the first one to show me a knock-off MD-Trader). GL, Pats, Easy Screen and Cantor all
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`demonstrated their versions of a "vertical" or ‘ladder" market display. They all seem to be unable to put all the
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`pieces together, probably a result of programmers being told to "copy TT" without understanding the functionality
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`that it delivers to the trader. Re—centering is the most obvious example of a feature often omitted from the various
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`knock-off attempts. More recently my Bloomberg rep came by to show me their most recent attempt at a futures
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`order entry screen. As he was demonstrating it to me he conceded that it was not that good yet, but he assured
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`me that Bloomberg had"'200 developers working to make a screen just like 'l'l"'.
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`As we have rolled out TT to our clients for direct access trading it seems they have a growing awareness of the
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`unique and superior TT trader interface.
`I am glad I saw your custom screen back in 2000 and I look forward to
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`. continued improvements in MD-Trader.
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`Daniel Durkin
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`Director
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`Merrill Lynch Futures
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`312~869-6400
`312-701 -1 357 fax
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`The information herein has been obtained from sources which we believe to be reliable, but we do not guarantee its accuracy or completeness.
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`The information is for discussion purposes and neither the information nor any opinion expressed constitutes a solicitation by us of the
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`purchase or sale of any securities or other financial instruments. The material is intended for the sole use of the person or firm to whom it is
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`provided by us.
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`---——Original Message—-—-
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`From: Harris Brumfield (‘Fl’) [mailto:Harris.Brumfield@tradingtechnologies.com]
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`Sent: Thursday, May 27, 2004 5:02 PM
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`To: Durkin, Daniel (GED)
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`Subject: Memory Recall!
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`Hi Dan,
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`I was wondering if you could do me a favor. You were one of the early people outside of ‘IT to see a demo
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`of MD Trader.
`I was wondering if you remember that demo and could recall your initial thoughts re: the
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`invention. Also. lwas wondering if you recall how the industry reacted to the release of MD Trader andif
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`6/2/2004
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`Highly Confidential
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`Attorneys‘ Eyes 00')’
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`TT 020829
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`Message
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`you have witnessed any copying out there.
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`Any thoughts on theses topics would be helpful.
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`Thanks, Harris
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`If you are not an intended recipient of this e-mail, please notify the sender, delete it and do not read, act
`upon, print, disclose, copy, retain or redistribute it. Click here for important additional terms relating to
`this c-mail.
`h_t_tp://www.ml.coIn/email termsl
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`6/2/2004
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`Page 14 of 71
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`Highly Confidential
`Attorneys’ Eyes Only
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`TT 020830
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`TTX00O2083O
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`

`
`DECLA RATION OF DAVID ELLIS
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`1, David Ellis. declare that:
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`1 am personally familiar with the facts set forth herein, and, if called as a Witness,
`l.
`1 could and would testify thereto of my own personal knowledge.
`
`I started my career as a professional trader over 27 years ago. In 1977. I started
`2.
`trading on the open-outcry floor of the lvL‘dAmerica exchange in Chicago. where I traded
`mini contracts on hogs, cattle and grain. From around 1978/79 until i996. I traded at
`various times on the floors of the Chicago Board of Trade (“CBOT”) and the Chicago
`Mercantile Exchange ("CME.”). In the mid 1990s I started trading electronically on
`Giobex, the CME’s electronic trading platform
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`Near the end of 1996, lfounded DE Trading. a proprietary trading firm, and also
`3.
`started trading electronically on Eurex. At that time, [became a customer of Trading
`Technologies ("l"l"'). The firm started with 3 traders. all trading electronically on Eurex.
`Today, DE Trading has around 90 traders trading electronically. I am President of DE
`Trading and International Trading Group. both of which are located in Glenview. Illinois.
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`I saw ‘[“I"s MD Trader product when it was first released in around the fall of
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`2000. Prior to seeing MD Trader, I was aware of a wide variety of electronic trading
`sofiware platforms, including 'l'1"s previous software, the Eurex green screen, the Global:
`front-end, and sonware sold by GL. Easyscreen. Yes Trader and other vendors.
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`MD Trader provided for a fast one-click order entry mechanism that was accurate
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`in that the trader could be confident in the order going in at the intended price. This was
`accomplished by allowing the traderto click to send orders in cells aligned with prices
`that remained static on the screen. In previous systems of which I was aware, the prices
`would move on the screen when the market changed. lf this happened at the moment a
`trader entered a click, the order would be sent in at an unintended price. MD Trader also
`provided a visual format in which market data was displayed against the static prices such
`that the data would move up and down the screen.
`I had never seen these features before
`MD Trader.
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`The improved order entry reduces mistakes. Also, the visual format of MD
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`Trader allows traders to easily see relative movements of multiple products when
`multiple MD Trader windows are displayed side-by-side (for example, when spreading
`two or more products). In my opinion. these features provide an important benefit to the
`trader. Relatively quickly afterMD Trader was first available. lhe vast majority of the
`traders at DE Trading were using MD Trader as their primary order entry and
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`management tool. In my experience, it is very rare for a trader to start using MD Trader
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`and then go back to using an older style trading screen.
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`I declare under penalty of perjury Lhét the foregoing is true and correct. Executed on
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`September 13 . 2004.
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`David Ellis
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`DECLARATION OF DAVID FELTES
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`personally familiar with the taste set forth herein. and, if called as a witness,
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`l could and would testify thereto of my own personal knowledge.
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`Ijoined Marquette Partners, an proprietary trading firm. around 10 years ago as
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`head of 1'1‘. Four years ago. lhecan-re Managing Director. In this role, I am responsible
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`for managing the London office ofManquerte and help review which Independent
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`Software Vendors (lSVs) Marquette uses for its trading software. Marquette was an early
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`pioneer in electronic futures trading and now has over 85 traders. IT professionals and
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`support staff. Marquette, is a leading liquidity provider to the world’s largest derivatives
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`exchanges and has successfully trained individuals who trade on electronic exchanges
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`around the world, including the Chicago Mercantile Exchange, CBOT. Eurex. Euronext-
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`Paris. Euronext-LIFFE and Borsa ltalia. I currently reside inLondon and spend around
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`three months a year in Chicago, Dlinois.
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`In November of 2000, I saw a demonstration of Trading Technologies‘ ("’l"l"‘)
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`new product called MD Trader. The design of MD Trader was unlike anything lhatl
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`seen previously. At the time I was aware of a variety of different trading platfiomrs.
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`including 'l'l"s previous system. systems offered by GL and Orc and the Globe): and
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`Project A front-ends. These systems all presented the best bit! and best ask prices side by
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`side in designated locations such that a trader was required to read and inretyret numbers
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`to figure out movements in the market.
`In these previous systems. when a trader went to
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`click to send an order the trader-ran the risk of the price on which he was clicking
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`changing at that moment and the order being sent in It rt different price than intended.
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`MD Trader provided a much better visualization of the market such that traders
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`could easily see the flow of the market as compared with the trading systems available at
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`the time. This was ac