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Government Rests Case Against 12 Merc Traders

January 16, 1991

CHICAGO (AP) _ Government prosecutors have rested their case in the trial of 12 Chicago Mercantile Exchange traders accused of defrauding customers through improper trading practices in the Japanese yen pit.

The trial began Sept. 5, 1990. The traders are accused of taking trading profits that should have gone to customers.

Defense attorneys were prepared to begin their case today.

On the final day of government testimony, two customers said prearranged trading forced them to receive bad executions for yen orders that deprived them of several thousand dollars.

John O’Neill told a federal jury that his order in January 1988 to sell yen contracts became the target of a prearranged trade between broker Thomas Braniff and Michael Smith, one of those on trial.

O’Neill, 34, of Cleveland, said the mishandling cost him about $2,500.

Clay Williams, 27, of Bryan, Texas, said that a Jan. 5, 1989 order he placed to sell yen contracts had been mishandled by broker James Sledz. The amount Williams allegedly lost was unclear.

Sledz and Braniff pleaded guilty to wrongdoing and testified against Smith and the others on trial.

Defense attorneys have told U.S. District Judge William T. Hart that their case will include the playing of a videotape of yen pit traders in action on a typical market day.

The defense is expected to last about two days.

The yen traders are among 48 people from the Merc and the Chicago Board of Trade who were indicted in 1989 on charges stemming from an unprecedented federal investigation at the world’s two largest commodities exchanges.

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