DECLARATION OF RAY CAHNMAN
`
`I, Ray Cahnman, declare that:
`
`I am personally familiar with the facts set forth herein, and, if called as a witness,
`1.
`I could and would testify thereto of my own personal knowledge.
`
`I have a Bachelor of Science degree in Mathematics from DePaul University and
`2.
`a Master of Business Administration degree from Tulane University.
`
`I began my trading career at the Chicago Board of Trade ("CBOT") in October of
`3.
`1975. In 1980, I founded Aardvark Financial, a CBOT clearing firm. Aardvark Financial
`became a clearing member of the Chicago Mercantile Exchange ("CME") in 1981. The
`firm was renamed TransMarket Group in 1984.
`
`Transmarket Group L.L.C. is a global private trading and investment company
`4.
`that trades various exchange listed derivatives, equities, commodities and cash markets
`electronically. As electronic, screen based trading emerged, Transmarket became an
`early leader in making use of technology trade electronically. Transmarket currently has
`around 150 traders, trading from different locations around the world. Transmarket's
`headquarters are located at 141 W. Jackson, Suite 1930, Chicago, lllinois. I am currently
`Chairman of Transmarket Group.
`
`I qualified as an independent floor trader on the London International Futures
`5.
`Exchange ("LIFFE") and the Sydney Futures Exchange in 1989. From 1999-2002, I
`served as Director of the Chicago Board of Trade. I have, therefore, witnessed and
`experienced first-hand the transition from trading on the floors in an open outcry system
`to the trading of products electronically via screens connected to electronic exchanges.
`
`I currently trade cash U.S. Treasuries, Treasury futures, Eurodollar futures,
`6.
`Euribor futures and Eurex yield curve products electronically. I have traded
`electronically on the CBOT, CME, LIFFE, BrokerTec, E-speed and Eurex.
`
`I first became exposed to Harris Brumfield's idea behind MD Trader in the Spring
`7.
`of 2000. I remember being shown a trading screen in which market depth was displayed
`relative to a fixed or static column of prices and in which the trader could quickly and
`accurately enter orders by clicking on cells associated with the prices. I recall being
`struck by the innovative way in which this screen displayed market information and
`allowed for order entry. I also recall being struck by how different this screen was from
`anything I had ever seen before. The MD Trader screen was significant departure from
`
`Or
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`the standard order entry screens that were prevalent at the time- screens that displayed
`the market information in a normal order book fashion.
`
`I started using IT's MD Trader right around the time that IT launched it as a
`8.
`product. Once I started using the product, I knew that this was a great idea. The product
`proved to be a huge improvement over the trading tools that existed at the time. The
`static nature of the prices allowed the trader to see the movements in the market depth
`much easier through a more intuitive screen. This allowed a trader to recognize
`opportunities much quicker. Also, MD Trader provided for the ability to quickly enter
`orders at various price levels without the possibility of error because there was no risk of
`the prices changing while the trader was attempting to enter an order with the mouse.
`The one-click recentering feature of MD Trader was also very 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.
`
`Because of the more intuitive trading screen and the improved fast and reliable
`9.
`order entry and management, the MD Trader screen allows for traders to react much
`more quickly to fast changing market conditions than the preexisting systems. Speed is a
`critical issue for electronic traders. Anything that allows a trader to decrease the time it
`takes to recognize an opportunity and send an order to the exchange is invaluable. One
`of the most impressive things about MD Trader is the fact that prior to its release traders
`did not even perceive a problem with the old tools they were using. It was not until
`seeing the benefits of MD Trader, did they realized the shortcomings of the old order
`book type screens.
`
`After TT launched MD Trader, many competitors of TT released screens that
`10.
`duplicated the static price, the improved order entry and the recentering features of MD
`Trader. In fact, most independent software vendors ("ISVs") have come out with a copy
`of the MD Trader screen. These competitors needed to do this because potential
`customers, such as myself, told them that TT's MD Trader screen was far superior from
`their traditional order book type screens. In fact, I told representatives from competitors
`of TT, including Patsystems and Eccoware, that they should not even bother trying to
`pitch me their systems until they put a screen like MD Trader into their product.
`
`At the time of the MD Trader launch, I recall being surprised that Harris
`11.
`Brumfield pennitted TI to launch MD Trader as a product as opposed to keeping the
`technology for himself. I believe that it is likely that if Harris Brumfield had not decided
`to permit TT to put MD Trader out there, we would still be using traditional order book
`type screens today as the standard way of doing order entry.
`
`I declare under penalty of perjury that the foregoing is true and correct. Executed on July
`~,2004.
`.
`
`~~ ~
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