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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF ILLINOIS
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`-----------------------------------x
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`TRADING TECHNOLOGIES, INC.,
`
`-against-
`
`Plaintiff,
`
`Case No.
`04-CV-5312
`
`eSPEED, INC.,
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`-----------------------------------x
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`Defendant.
`
`April 7, 2005
`9:49 a.m.
`
`Videotaped deposition of ROBERT G.
`
`McCAUSLAND,
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`taken by Defendant, pursuant to
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`subpoena, at the offices of Winston & Strawn LLP,
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`200 Park Avenue, New York, New York, before Jack
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`Finz, a Certified Shorthand Reporter and Notary
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`Public within and for the State of New York.
`
`TTX03566849
`
`IBG 1075
`IBG v. TT
`CBM2016-00054
`
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF ILLINOIS
`
`-----------------------------------x
`
`TRADING TECHNOLOGIES, INC.,
`
`-against-
`
`Plaintiff,
`
`Case No.
`04-CV-5312
`
`eSPEED, INC.,
`
`-----------------------------------x
`
`Defendant.
`
`April 7, 2005
`9:49 a.m.
`
`Videotaped deposition of ROBERT G.
`
`McCAUSLAND,
`
`taken by Defendant, pursuant to
`
`subpoena, at the offices of Winston & Strawn LLP,
`
`200 Park Avenue, New York, New York, before Jack
`
`Finz, a Certified Shorthand Reporter and Notary
`
`Public within and for the State of New York.
`
`TTX03566849
`
`IBG 1075
`IBG v. TT
`CBM2016-00054
`
`
`
`A P P E A RAN C E S:
`
`McDONNELL BOEHNEN HULBERT & BERGHOFF LLP
`Attorneys for Plaintiff
`300 South Wacker Drive
`Chicago, Illinois 60606-6709
`
`BY:
`
`MATTHEW J. SAMPSON, ESQ.
`
`WINSTON & STRAWN LLP
`Attorneys for Defendant
`35 West Wacker Drive
`Chicago, Illinois 60601-9703
`
`BY:
`
`RAYMOND C. PERKINS, ESQ.
`PEJMAN SHARIFI, ESQ.
`
`FRIED FRANK LLP
`Attorneys for the Witness
`One New York Plaza
`New York, New York 10004
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`BY:
`
`DAVID ZILBERBERG, ESQ.
`
`ALSO PRESENT:
`
`STEVEN BORSAND
`
`PATRICK CATANIA
`
`ROBERT CALVERT, Videographer
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`TTX03566850
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`THE VIDEOGRAPHER: We are now on the
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`Page 3
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`record.
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`This is the video operator speaking,
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`Robert Calvert, of LegaLink Action Video, offices
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`located at 420 Lexington Avenue, New York, New
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`York. Today's date is April 7, 2005. The time
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`on the video monitor is 9:49 a.m.
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`We are here at the offices of Winston
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`& Strawn, located at 200 Park Avenue, New York,
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`New York, to take the videotape deposition of
`
`Robert McCausland, in the matter of Trading
`
`Technologies, Incorporated, versus eSpeed,
`
`Incorporated. The venue of this case is the
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`14 United States District Court for the Northern
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`15 District of Illinois. The index number is
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`04-CV-5312.
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`Will counsel please voice identify
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`yourselves and state whom you represent.
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`MR. PERKINS: Good morning. Ray
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`Perkins, representing the defendant, eSpeed.
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`MR. ZILBERBERG: David Zilberberg,
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`representing the witness, Robert McCausland.
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`MR. SAMPSON: Matt Sampson from
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`24 McDonnell Boehnen Hulbert & Berghoff,
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`TTX03566851
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`representing the plaintiff, Trading
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`Technologies. With me today is Steven Borsand
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`from Trading Technologies, and Patrick Catania,
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`an independent consultant.
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`THE VIDEOGRAPHER: Will the court
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`reporter please swear in the witness.
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`R 0 B E R T
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`G.
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`M c C A U S L A N D,
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`having been first duly sworn by the Notary Public
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`(Jack Finz), was examined and testified as
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`follows:
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`THE VIDEOGRAPHER: Please begin.
`
`EXAMINATION BY MR. PERKINS:
`
`Q.
`
`Sir, could you please state your name
`
`for the record?
`
`A.
`
`Q.
`
`A.
`
`Q.
`
`A.
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`Q.
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`correct?
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`Robert McCausland.
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`And where do you live?
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`I live in Mendham, New Jersey.
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`What's your street address?
`
`21 Pembroke Drive.
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`You have been deposed before; is that
`
`A.
`
`Q.
`
`A.
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`Yes,
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`I have.
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`About how many times?
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`At least three.
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`Page 4
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`TTX03566852
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`Q.
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`How many times have you been deposed
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`regarding the Intex system?
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`A.
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`Well, once where it was the relevant
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`system in question, yes.
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`Q.
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`A.
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`And which case was that?
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`That was -- I guess at that point it
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`was eSpeed versus the three commodity exchanges,
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`Board of Trade, the Chicago Mere and the New York
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`9 Mere.
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`Q.
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`Do you still have a copy of that
`
`deposition?
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`A.
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`Q.
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`If I do,
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`I don't know where it is.
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`If at any time you do not understand
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`my questions, just let me know and I will try to
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`repeat or rephrase the question. Do you agree to
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`do that?
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`A.
`
`Yes. Thank you.
`
`(Defendant's Exhibit 110
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`for identification, subpoena.)
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`Q.
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`Let me show you what I have marked as
`
`a copy of Defendant's Exhibit 110, which is the
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`subpoena that my office served on you, sir. Have
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`you seen this document before?
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`A.
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`Yes,
`
`I have.
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`Page 5
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`TTX03566853
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`Q.
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`And in this subpoena, as the
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`attachment, there is a request for documents.
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`Did you read that, sir?
`
`A.
`
`Q.
`
`Yes,
`
`I did.
`
`And did you look for documents in
`
`response to the subpoena?
`
`A.
`
`Q.
`
`I did.
`
`And did you have any documents in
`
`response to the subpoena?
`
`A.
`
`I had a few documents which were
`
`relevant to some system design and testing
`
`procedures, but that was about it. The majority
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`of the documents that I once had with Intex, I
`
`left them in Bermuda when I left.
`
`Q.
`
`When you say you left them in
`
`Bermuda, specifically where did you leave them in
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`Bermuda?
`
`A.
`
`Q.
`
`in Bermuda?
`
`A.
`
`Q.
`
`A.
`
`Intex had an office on Church Street.
`
`So you left them at the Intex offices
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`Yes.
`
`When did you leave Intex?
`
`Well, in -- let's see.
`
`In 1988
`
`Security Pacific exercised an option to license
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`Page 6
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`TTX03566854
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`the Intex software, and at the time they
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`purchased the physical computer installation that
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`Intex was running, and it was set up so that the
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`facility would continue to run Intex and would
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`also operate the Security Pacific -- it was an
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`odd lot Treasury system. You know, the point was
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`at that time I went to work for Security Pacific,
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`because I was running the facility.
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`Q.
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`And while you were working -- so you
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`started working for Security Pacific in 1988?
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`A.
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`Q.
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`Yes.
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`Were you still working on the Intex
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`system when you were working for Security
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`Pacific?
`
`A.
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`No.
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`I was only basically overlooking
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`the operation of it.
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`Q.
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`How long did you overlook the
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`operation of Intex when you were at Security
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`Pacific?
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`A.
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`Until, I guess it was sometime in
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`1989, both systems -- Security Pacific had
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`started up, and they closed down because the bank
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`had decided they were going to get totally out of
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`the securities business. And at that time Intex
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`Page 7
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`TTX03566855
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`also stopped operating.
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`Q.
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`So would it be fair to say that your
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`involvement with the Intex system ended in 1989?
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`A.
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`Q.
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`Yes.
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`And any documents you had regarding
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`the Intex system you left at the Intex office in
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`1989?
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`A.
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`Q.
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`question.
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`Yes.
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`What documents -- strike the
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`While you were involved with the
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`Intex system, what documents did you have
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`relating to the Intex system?
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`A.
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`Well, we had very detailed testing
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`procedures and scripts, because we did all the
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`primary testing of any software versions that
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`were introduced at the Bermuda facility.
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`Also, there were some, obviously,
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`user handbook-type of thing, how to use the
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`system, what the operational functions and
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`procedures were.
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`Q.
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`Any other documents that you recall
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`having?
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`A.
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`I'm sure there were some other things
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`Page 8
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`TTX03566856
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`that related to the system. Obviously, the
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`system's operational procedures and the
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`communications procedures, recovery, fallback
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`recovery-type things, would be included in that.
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`Q.
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`Do you know if Security Pacific is
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`still in business today?
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`A.
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`Q.
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`business?
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`No.
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`Do you know when they went out of
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`A.
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`I'm thinking in the early to mid
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`nineties, I believe.
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`I believe it was the Bank
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`of America acquired Security Pacific Bank.
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`Q.
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`Do you know what happened to the
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`Intex facilities that were in Bermuda?
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`A.
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`Well, it was essentially taken
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`apart.
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`Some of the equipment was,
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`I think,
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`shipped back to New York and stored in Security
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`Pacific facilities. What wasn't was sold.
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`Things like air conditioners, and those types of
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`things, were left there and then sold off.
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`Q.
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`Do you know what happened to the
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`equipment used with the Intex system?
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`A.
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`Well, the main computers that were
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`used in Bermuda were, as I say, shipped back to a
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`Page 9
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`TTX03566857
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`Security Pacific facility in the metropolitan
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`area here. What happened to them then, I have no
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`idea.
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`Q.
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`If I wanted to see how the Intex
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`system actually looked on the screen, are you
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`aware of anyone that may have an operational or
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`an inoperational Intex system?
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`A.
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`Well, I'm thinking of the people that
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`were involved in Intex, those who might have
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`something, first I would think is Larry Gomes,
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`who was -- he headed up the development group,
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`the programming group. And he very well may have
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`documents that would show what the displays
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`14 were. My other alternative would be somebody
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`like David Thompson, who was the business manager
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`for Intex in Bermuda and, you know, was involved
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`in actually the ultimate winding up of Intex as a
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`business and as a company.
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`Q.
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`A.
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`Anyone else?
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`Right offhand, no,
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`I can't think of
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`anybody else. There was -- Intex had a marketing
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`office in New York, and a representative in
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`Chicago, I believe, for a while, by the name of
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`Pat Catania. Most of the people that were
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`Page 10
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`involved in the New York office, you know,
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`I
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`really don't know where they are, or what they're
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`doing.
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`Q.
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`You mentioned Pat Catania. Pat
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`Catania is here in the deposition room today; is
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`that correct?
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`A.
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`Q.
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`Yes, he is.
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`What role did Mr. Catania play within
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`Intex, to your knowledge?
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`A.
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`I think he was, you know, more or
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`less a marketing representative for Intex in
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`Chicago. What other duties were pretty much
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`involved in supporting installations that were
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`made out there.
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`Q.
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`To your knowledge, was he in charge
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`of selling the Intex system?
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`A.
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`To specific clients in the Chicago
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`area.
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`Q.
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`A.
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`Do you know who those clients were?
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`No.
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`I can't think of the names of
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`who we might have had in Chicago at that point.
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`Q.
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`Do you know if Mr. Catania was
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`involved in the development of the Intex system?
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`A.
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`Not really.
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`Page 11
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`TTX03566859
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`Q.
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`When you say not really, what do you
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`mean?
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`A.
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`Well, the development was really -- I
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`did most of the specification work for it, and
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`Gomes and his company did all the programming,
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`and the people we had in Bermuda did all the
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`testing.
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`Q.
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`And Mr. Catania was not involved in
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`any of those things that you mentioned?
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`A.
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`Not on a regular basis.
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`If he did
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`participate, maybe in some testing, and so
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`forth. But it was not on a regular basis.
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`It
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`wasn't a primary responsibility for him.
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`Q.
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`Did you know Mr. Catania when you
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`were at Intex?
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`A.
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`Q.
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`Yes. We met several times.
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`Did you have any discussions with Mr.
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`Catania about the operation of the Intex system?
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`MR. SAMPSON: Objection to the form;
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`vague as to time.
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`MR. PERKINS:
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`I will rephrase.
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`A.
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`I think you would have to refine that
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`a little bit more. That's pretty general.
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`Q.
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`All right. Let's start with prior to
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`Page 12
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`TTX03566860
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`1989, do you recall having any discussions with
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`2 Mr. Catania about the operation of the Intex
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`system?
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`A.
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`I can't say that we didn't discuss
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`something.
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`I don't specifically remember any
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`meetings that we had where we were talking about
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`the system.
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`I think we tended to be more social
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`when we saw each other, which was, you know, not
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`that frequent.
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`Q.
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`Do you know if Mr. Catania was
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`involved in preparing any of the user manuals for
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`the Intex system?
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`A.
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`Q.
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`A.
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`I don't know.
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`What about -- I'm sorry?
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`Because some of that was prepared
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`16 with the group in New York.
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`Q.
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`What about the functional
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`specifications for Intex, was Mr. Catania
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`involved in preparing those?
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`A.
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`No. The functional specifications
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`were all prepared by myself and the people who
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`worked with me.
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`Q.
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`After 1989, have you had any
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`discussions with Mr. Catania about the Intex
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`Page 13
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`TTX03566861
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`system?
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`A.
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`Q.
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`No.
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`When is the last time you spoke with
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`Mr. Catania?
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`A.
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`It's been a long time. Sometime in
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`the late eighties we may have run into each other
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`out in Chicago in an unrelated application, when
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`I was part of a group that was in the process of
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`selling a system to the Board of Trade. Mr.
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`Catania worked for the Board of Trade at that
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`time.
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`So I think we probably saw each other once
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`or maybe twice during that time. But only just,
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`as I say, to exchange pleasantries.
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`Q.
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`Larry Gomes, do you know where he is
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`today?
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`A.
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`In -- I can't think what's the name
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`of the town he's in. He lives in West
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`it's
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`not Westport. South side of Boston, in
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`19 Massachusetts.
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`Q.
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`When is the last time you spoke with
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`21 Mr. Gomes?
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`A.
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`Q.
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`system?
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`Probably maybe two, three months ago.
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`Did you two speak about the Intex
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`He did bring up the Intex system and
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`asked about if certain operational features
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`that -- you know, for clarification, but it
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`4 wasn't very much.
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`I mean, we, again, sort of
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`caught up. We had been business partners, and we
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`had some joint companies that were at that time,
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`or in the last year, have been in the process of
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`being wound up.
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`Q.
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`When you two spoke about the Intex
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`system about two or three months ago, do you
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`recall what he asked you about the Intex system?
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`A.
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`He,
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`I believe, was asking about the
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`functionality of how you initiate a trade.
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`Q.
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`A.
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`And what did you say to him?
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`Well, you have to understand what we
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`were working with at that time at Intex. Our
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`trading station was a PDP 11, and it had, you
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`know, a keyboard attached to it, it had a CRT
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`attached to it, and obviously the communication
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`interfaces. And so the keyboard had designated
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`keys that were highlighted for certain functions,
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`and there were certain, as I say, certain
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`designated functional keys that allowed the user
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`to move around on the screens and select a given
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`contract, and then there were also keys that
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`allowed them to initiate an order, to bring up
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`the order form and into which you would put the
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`variables of price, size, et cetera.
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`And, you know, he was asking me about
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`that, if what he understood or remembered was
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`what I understood and remembered.
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`Q.
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`A.
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`We will talk about --
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`And at that point I was going
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`strictly from what I remembered.
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`I had no
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`documents that supported me.
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`Q.
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`And we will talk more in the
`
`deposition about how orders are placed in the
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`Intex system.
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`Let me ask you this: Did you and Mr.
`
`Gomes talk about the price column in the Intex
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`system?
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`A.
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`No. When you say the price column,
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`what
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`Q.
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`About, specifically -- well, strike
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`the question.
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`Did you and Mr. Gomes talk about how
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`the prices are displayed in the Intex system?
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`A.
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`No.
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`I think basically what we talked
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`about was, you know, how you initiated a
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`transaction, or took an order.
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`I don't think we
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`talked about the composition of the display.
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`It
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`was more, you know, given you have a certain
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`display, how you initiated transactions.
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`Q.
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`Did you and Mr. Gomes talk about
`
`whether or not the Intex system had a static
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`price axis?
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`MR. SAMPSON: Objection to the form
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`of the question.
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`A.
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`I think you will have to define what
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`you mean by that.
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`Q.
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`Did that subject ever come up in your
`
`conversation with Mr. Gomes?
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`A.
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`Q.
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`Would you repeat that again?
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`Sure. Did the subject of a static
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`price axis come up in your conversation where Mr.
`
`Gomes?
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`MR. SAMPSON: And I have a continuing
`
`objection to the extent that he is asking him
`
`about legal terms in the patent in this case.
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`A.
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`Well, you know, that term never came
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`up.
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`Q.
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`That's all I am asking.
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`Now, you said that you and Mr. Gomes
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`talked about how the orders were placed in the
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`Intex system with the keyboard; is that correct?
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`A.
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`Yes. He did ask, you know, if it
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`went the way, you know, the way we understood it
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`to have worked.
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`Q.
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`And could you describe to me what he
`
`said to you and what you said to him about how
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`orders were placed?
`
`A.
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`You're asking me to be very specific
`
`about a conversation I had several months ago.
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`Q.
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`A.
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`If you can.
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`Which I don't necessarily, you know,
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`recall.
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`I mean,
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`I recall just the subject
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`15 matter, what he asked and what I said.
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`I'm
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`afraid I couldn't give you any more detail than
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`you already have.
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`Q.
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`Did you find yourself agreeing or
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`19
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`disagreeing with how Mr. Gomes described how
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`24
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`orders were placed in the Intex system?
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`MR. SAMPSON: Objection to the form
`
`of the question.
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`A.
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`Let's put it this way: He asked me
`
`did it work this way, and I said yes, that was my
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`understanding, that it worked this way.
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`Q.
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`So you agreed with how Mr. Gomes
`
`described the operation of the Intex system in
`
`terms of how it --
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`A.
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`I agreed with the question he had
`
`asked, and then his conclusion to it.
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`Q.
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`Fair enough.
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`Do you recall anything else about
`
`that conversation with Mr. Gomes?
`
`A.
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`Q.
`
`A.
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`Q.
`
`We talked about his real estate.
`
`As
`
`As to Intex, no.
`
`When was the last time you spoke with
`
`David Thompson?
`
`A.
`
`Let's see. Probably close to ten
`
`years ago.
`
`Q.
`
`Let me ask you this: Other than Mr.
`
`Gomes,
`
`after 1989, have had discussions with
`
`anyone else regarding the Intex system?
`
`A.
`
`Well,
`
`I gave the deposition in that
`
`other case, and that was the subject of a lot of
`
`the questioning.
`
`Q.
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`Other than that deposition and your
`
`conversation with Mr. Gomes, since 1989 have you
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`had discussions with anyone else about the Intex
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`system?
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`A.
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`I may have, but I don't recall
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`specifically.
`
`(Defendant's Exhibit 111
`
`for identification, document bearing production
`
`numbers M 1 through M 17.)
`
`Q.
`
`I am showing you what has been marked
`
`as Defendant's Exhibit 111.
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`It is Bates stamped
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`10 M 1 through M 17. This is a document that you
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`found in response to the subpoena.
`
`Is that
`
`correct?
`
`A.
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`Q.
`
`Yes.
`
`This is the only document that you
`
`found that was responsive to the subpoena; is
`
`that correct?
`
`A.
`
`Q.
`
`That's correct.
`
`And could you describe for us what
`
`this document is?
`
`A.
`
`Okay.
`
`MR. ZILBERBERG:
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`Just take however
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`much time you need to look it over.
`
`It also looks like it's a number of
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`documents.
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`Page 20
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`A.
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`Yes, it's really three documents.
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`The first one has to do with a development to
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`process open spreads in the system, and that was
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`in a way that would show the implied order that
`
`exists when a spread is placed in a commodity
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`system.
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`First, just a quickie, a spread is,
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`you know,
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`I want to buy or I want to sell the
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`near month and buy the further month, and it's
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`designated that I'm willing to do that with a
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`spread value, which determines what the two
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`prices will be, or the relationship between the
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`two prices.
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`Now, when you put a spread order in,
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`you say, okay, I want to sell the near and buy
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`the far, if you are selling the near and there's,
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`say, a bid in the near month, then there's an
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`implied sell in the far month at a known price,
`
`because it's the bid price plus or minus the
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`spread value, the differential.
`
`So what this was was an attempt to
`
`define how we could put that into the system so
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`that we could display these implied orders. And
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`obviously that's designed to improve liquidity,
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`Page 21
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`because people would see more orders,
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`particularly in the far months, so that it would
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`encourage more trading.
`
`Q.
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`And the first document, which
`
`document is that? Could you identify the pages?
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`A.
`
`Q.
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`That's 1 through 4.
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`And does the first document show how
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`the spread was displayed on the screen of Intex?
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`MR. SAMPSON: Objection to the form
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`of the question.
`
`A.
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`Actually, no, it doesn't talk about a
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`display.
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`It has an illustration to show what the
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`values would be.
`
`Q.
`
`Do you know the date of this first
`
`document?
`
`A.
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`Probably sometime in 1987.
`
`I'm
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`guessing.
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`It could be '86-'87, in that time
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`frame.
`
`Q.
`
`And it says "To: Distribution." Do
`
`you know who was part of the distribution list?
`
`A.
`
`Well, there would be -- obviously,
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`Mr. Gomes would be on that list. There were Dr.
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`Brian and his associates. David Graves, who was
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`the senior manager of Intex at that point.
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`Q.
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`A.
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`Anyone else that you can recall?
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`Well, a fellow named Bill White, who
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`worked for a company that Dr. Brian operated or
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`controlled.
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`Q.
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`A.
`
`Q.
`
`Anyone else that you could recall?
`
`Not specifically.
`
`You mentioned Dr. Brian and his
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`associates. Who is Dr. Brian?
`
`A.
`
`Okay. Dr. Earl Brian took over the
`
`operation, management of Intex, in 1983.
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`Intex
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`launched in 1981. There was a period of software
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`development by the group that was headed up by a
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`fellow named Tom Saleh. They were located in the
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`Boston area. At that time Larry Gomes was one of
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`the people that he was using for development.
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`And at that time his concept, or
`
`Saleh's concept was that he was going to have a
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`network that was going to run on the Stratus
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`system. Stratus at that time was a nonstop-type
`
`of processor, and for reliability purposes he
`
`felt that that was the proper thing. And he
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`actually installed Stratus systems in Bermuda, in
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`London and in New York. And he had a group of
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`people who were doing development work on the
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`Stratus system. A couple of the lead people were
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`actually gone and were living in Bermuda. They
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`were operating from there.
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`And the facility was -- they were
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`using a facility on the Cable and Wireless
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`grounds there, which was, again, a high
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`availability facility.
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`Okay.
`
`In 1983 their software
`
`couldn't cut the mustard.
`
`It was simply too
`
`slow.
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`It just was not an operational acceptable
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`process.
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`Also at that time the funding for
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`Intex was running out. Most of the funding had
`
`come from a man in Texas, Wallace Sparkman, who
`
`had a company called Sparkman Energy, and he had
`
`put the initial funding together.
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`So the company
`
`got launched.
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`It existed in Bermuda as an
`
`exchange.
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`So it had special legislation which
`
`created it as an exchange.
`
`Okay, this gets us back to who is
`
`Earl Brian.
`
`In 1983 several of the original
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`partners who started Intex sought out Earl Brian
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`to take over the management of it, restructure
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`it, refinance it, and get it launched, which he
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`did. He closed the contract or settled the
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`contract with Saleh and his people. They had a
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`specific contract with Intex to provide the
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`software, and in that they had a significant
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`profit-sharing role.
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`He settled that. He then actually
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`ended up hiring Larry Gomes to form a development
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`team and to reprogram, and we ended up doing that
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`reprogramming, because we looked at the old
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`software and code and it just wasn't applicable,
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`it wasn't changeable to what we wanted it to do.
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`And so -- I can't remember what his
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`company was down in Maryland there. He had a
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`software company that did government contracts.
`
`Q.
`
`A.
`
`Earl Brian did?
`
`Yes. And that was the company that
`
`was used as a place where the development took
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`place. Actually Gomes and his people really
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`19 moved down there and operated out of that while
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`20
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`the initial development work was done.
`
`Q.
`
`Do you know where Earl Brian is
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`today?
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`A.
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`Exactly, no. He was indicted.
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`I
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`don't know whether he went to prison or not.
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`Q.
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`Can you remember when he was
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`indicted?
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`A.
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`That was about four years ago,
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`I
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`think.
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`Q.
`
`A.
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`You said four years ago?
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`I think about three or four years
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`ago. He was -- he had a number of companies, and
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`one thing he had gotten involved with was UPI,
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`and I think it was relative to the management
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`financials that they were publishing. He was one
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`of the early ones to figure out a way to cook the
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`books and make the thing look more profitable
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`than it was. And he got busted for that.
`
`Q.
`
`What about Tom Saleh, do you know
`
`where he is located?
`
`A.
`
`Q.
`
`A.
`
`No,
`
`I don't.
`
`What was Mr. Saleh's role with Intex?
`
`He put together a software group that
`
`contracted with Intex to develop the software and
`
`operate it.
`
`Q.
`
`When was the last time you spoke with
`
`22 Mr. Saleh?
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`23
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`24
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`A.
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`Q.
`
`Well over 20 years, I'm sure.
`
`Going back to what we marked as
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`Page 26
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`1 Defendant's Exhibit 111, the documents that you
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`6
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`7
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`produced in response to the subpoena, can we turn
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`to what is marked as M 4, page 4 of the first
`
`document.
`
`A.
`
`Q.
`
`Yes.
`
`And the top of it, that page is
`
`entitled "Impact of Derived Orders on Outright
`
`8 Market."
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`A.
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`Q.
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`Urn-hum.
`
`Then underneath that it looks like
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`there is a chart or grid with March, June,
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`September, December. Do you see that?
`
`A.
`
`Q.
`
`A.
`
`Urn-hum. Yes.
`
`What is that representing?
`
`Well, that was just a graphic to
`
`illustrate, you know, where derived orders would
`
`be displayed, or would be
`
`actually would be,
`
`and, you know, what would be displayed.
`
`It
`
`doesn't represent what the graphic would look
`
`like on the trading station.
`
`I mean, it was
`
`illustrative to show that when you have a spread,
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`it really represents two orders.
`
`Q.
`
`Let's look under where it says
`
`24 March. What does March represent?
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`Page 27
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`TTX03566875
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`A.
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`That's a maturity month for the
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`contract.
`
`Q.
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`And under bid, what does that column
`
`represent?
`
`A.
`
`Well, those are just
`
`they are --
`
`that's the bids that would exist
`
`in the March
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`contract. There was a bid for 40 at 769, a bid
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`for 70 at 768, and a bid for 50 at 766.
`
`Q.
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`It looks like there is like a D in
`
`front of the 40 and 70. Do you see that?
`
`A.
`
`Yes. The D is equal to a derived
`
`order.
`
`Q.
`
`Under the price column, what does
`
`that column represent?
`
`A.
`
`That's the trading price of the
`
`contract, or the order price in this case.
`
`Q.
`
`And the offer column, what does that
`
`represent?
`
`A.
`
`Same thing. That's the offer size at
`
`a given price.
`
`Q.
`
`Did Intex have a graphical user
`
`interface for spread trading?
`
`A.
`
`Well, this particular aspect of it
`
`was never implemented. They had a page where
`
`Page 28
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`TTX03566876
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`
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`1
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`2
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`3
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`4
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`5
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`6
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`7
`
`just spread trades were shown, and at that point
`
`the spread trade
`
`at that point the spread
`
`trade would only be executed when you had an
`
`offsetting spread trade that came in that had the
`
`same months but it was the opposite to the
`
`resting one.
`
`Q.
`
`What is the next document that is in
`
`8 Defendant's Exhibit 111?
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
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`15
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`16
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`17
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`18
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`19
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`20
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`21
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`22
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`23
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`24
`
`A.
`
`Okay. This is just -- was an overall
`
`logic design.
`
`MR. ZILBERBERG:
`
`Just state which
`
`page you are looking at.
`
`A.
`
`Q.
`
`We are on M 5, is it?
`
`M 5, yes.
`
`Can you just identify by page numbers
`
`what the second document is, the complete second
`
`document?
`
`A.
`
`Q.
`
`A.
`
`M 5 toM 11.
`
`You said this was a logic design?
`
`Yes. At one point there was a
`
`rewrite of the software, and these were -- you
`
`know, the first page really is listing what the
`
`objectives of that were.
`
`Q.
`
`When was this rewrite of the software
`
`Page 29
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`TTX03566877
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`1
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`2
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`4
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`5
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`8
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`13
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`16
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`17
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`18
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`design?
`
`A.
`
`Unfortunately, it doesn't have a date
`
`on it, does it? And I would think this was
`
`probably in '85-'86, in that time frame.
`
`Q.
`
`A.
`
`And why do you say that?
`
`That's approximately -- you know, the
`
`system had been operating for a year.
`
`It's
`
`probably about the time that the kind of issues
`
`that this addressed were being becoming obvious,
`
`and we would have undertaken redesign in
`
`important aspects of it.
`
`Q.
`
`Do you know who prepared this second
`
`document?
`
`A.
`
`Q.
`
`particular?
`
`I prepared the second document.
`
`Did you prepare this for anyone in
`
`A.
`
`Well, it would have been, again,
`
`probably for some of the general distribution
`
`19
`
`people, the people that were managing, plus,
`
`20
`
`21
`
`22
`
`23
`
`24
`
`obviously, the development people.
`
`I mean, some
`
`of it is just an overview for the first, you
`
`know, few pages there. And then you get into
`
`about one, two, three, four -- there's five pages
`
`of flow documents that highlight the changes.
`
`Page 30
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`TTX03566878
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`9
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`10
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`11
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`12
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`13
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`14
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`15
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`16
`
`Q.
`
`What is the next document in
`
`Defendant's Exhibit 111?
`
`A.
`
`The next document is an overview of
`
`the system testing that was going to be done
`
`prior to starting up Intex.
`
`It was pre live
`
`trading.
`
`Q.
`
`So this next document, the complete
`
`document isM 12 through M 17; is that correct?
`
`1984?
`
`A.
`
`Q.
`
`A.
`
`Q.
`
`17, yes.
`
`And it appears to be dated May 29,
`
`That's right.
`
`And you prepared this document; is
`
`that correct?
`
`A.
`
`Q.
`
`Yes,
`
`I did.
`
`And did you prepare it on or about
`
`17 May 2 9, 19 8 4?
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`A.
`
`Q.
`
`Well, no, sometime prior to that.
`
`Was Intex already up and running live
`
`at the time that you prepared this document?
`
`A.
`
`No. No, this was describing the
`
`system test that was going to be done prior to
`
`going live.
`
`Q.
`
`So when did Intex actually go live?
`
`Page 31
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`TTX03566879
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`1
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`2
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`3
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`4
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`5
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`6
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`7
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`8
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`9
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`10
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`11
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`12
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`13
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`14
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`15
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`16
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`A.
`
`That's a good question.
`
`I don't know
`
`for sure, but I think it was probably sometime in
`
`the summer, June-July.
`
`Q.
`
`A.
`
`Q.
`
`And what year?
`
`1984.
`
`Down at the bottom of page M 12, it
`
`says Intex Information Offices.
`
`A.
`
`Q.
`
`Urn-hum.
`
`And it looks like there is an office
`
`in New York, an office in Chicago and another
`
`office in London. Are you aware of any other
`
`offices that Intex had, other than in Bermuda?
`
`A.
`
`Intex offices? Well, at this time,
`
`no.
`
`I mean,
`
`I know the address changed for the
`
`New York office. They moved out of the Trade
`
`Center in Manhattan.
`
`I think they were in 100
`
`17 Wall or 90 W
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