Controversial Past Shadows CME Broker’s Present: Bobby Alpert’s Clash with Open Outcry Trading and Social Media

A Facebook group called "Chicago Mercantile Exchange Friends" with 2.0K members. The user’s profile is suspended from posting and contributing until June 14, 2024.
John Lothian

John Lothian

Executive Chairman and CEO

Not everyone who participated in the open outcry markets looks back on those days with fondness, or likes to be reminded of them by seeing the videos from The Open Outcry Traders History Project. Case in point is Bobby Alpert, former CME broker and local, half-brother of Barry Lind and one of the administrators of a CME-themed Facebook group.

I have been suspended from the Facebook group “Chicago Mercantile Exchange Friends” until June 14, 2024 by one of the administrators. I can only guess it is Alpert, with whom I have previously clashed on other CME-themed Facebook groups. Alpert has expressed his disdain and boredom multiple times upon seeing me post videos from The Open Outcry Traders History Project on Facebook.

I didn’t need to be suspended from the CME Facebook group, as the administrators in this group have it set for them to release posts and content. As an admin, he could have just deleted my posts instead of releasing them. Suspension is a vindictive response.

Alpert is used to strong-armed moves against people he does not like. He was involved in a famous dispute in the 1980s when he bought 20 futures contracts based on an oral order from former CME member Lee I. Wigod on Sept. 24, 1984. Wigod refused to acknowledge the trade. The Chicago Tribune said that Alpert received an illegal oral order from Wigod, but that the exchange backed Alpert.

That Tribune story, written in 1989 in the aftermath of the FBI raids on CBOT and CME traders, said, “Robert Alpert claimed he lost $33,000 on a trade executed at Wigod`s request. Alpert claimed Wigod orally asked him to make the trade. Wigod denied it. Oral orders are illegal under exchange rules, which say they must be in writing.” There is no such rule at the CME or under the CEA.

According to a summary of the case on, Alpert never produced any documentation to support his trade, which created an audit trail violation issue, but took a complaint to an exchange arbitration committee. Wigod refused to participate and the CME ruled against him.

Wigod’s clearing firm, Keystone, suspended his trading privileges and froze his assets because of the disputed trade. Keystone, acting as custodian, guarantor, and lessor of Wigod’s Merc membership, deducted the entire balance of $20,101 from his account to settle with Alpert after Wigod refused to participate in a Merc arbitration, which Wigod claimed was not mandatory. Wigod challenged the judgment in the Illinois Appellate Court. The Illinois Appellate Court ruled in Wigod’s favor, stating that the arbitration was unenforceable, but upheld disciplinary action for his refusal to arbitrate.

Following the appellate court decision, the Merc scheduled a disciplinary hearing to review Wigod’s behavior related to the arbitration. Weeks before the hearing, the exchange sought CFTC approval to double fines for major rule violations, effective the day before Wigod’s hearing.

The Merc held the disciplinary hearing and penalized Wigod with a revoked membership for 10 years and hit him with a newly doubled level fine of $135,000. The committee found Wigod guilty of refusing to arbitrate, dishonest conduct, and conduct detrimental to the exchange. Wigod’s appeals to the CME board and the CFTC were unsuccessful. Wigod then sued, alleging violations of Merc procedures and of the Sherman Act and the CEA, with claims surviving a motion to dismiss.

District Judge Conlon later granted summary judgment for the defendants, finding no antitrust violations or sufficient evidence to support Wigod’s claims. The Merc sought and was awarded $20,000 in sanctions against Wigod’s attorney, Scott Brainerd, for filing baseless claims. The court affirmed the summary judgment, noting that antitrust claims must be clearly unsupported to justify summary judgment.

Wigod tried to argue that he was punished so severely because Alpert was related to the powerful Barry Lind, chairman of Lind-Waldock and Co., the largest discount commodity broker in the U.S. Lind was also CME Executive Committee Chairman Leo Melamed’s best friend.

The Tribune reported at the time, “Alpert scoffs at Wigod`s charges. ‘Barry Lind is an innocent bystander,’ Alpert said. ‘Mr. Wigod was given every opportunity to defend himself, and he did not do that. He’s angry with me because I had him removed from the exchange.’”

Ultimately, Alpert’s floor trading career encountered a significant setback in 1999. He became involved in a major scandal in the S&P 500 pit, which the CME skillfully managed and resolved without attracting any media attention. If my memory serves me right, Alpert was one of 17 Merc members hit with fines and suspensions for bagging trades in the S&Ps. The Merc in those days only listed disciplinary actions on a bulletin board at the exchange, not on its website. The NFA report of the trade practice case is the only online digital record I can find.

I remember being alerted to this case by the head of an electronic trading only FCM who thought this would be the final spike in the heart for open outcry. He was convinced the connection between Alpert, a broker and dual-trading local in the S&Ps feeding on orders from Lind-Waldock customers, and his half-brother Lind would cause an overwhelming uproar. However, the story of the fines and suspensions never made it into the press, and the uproar was avoided.

Although Alpert had previously faced infractions at the exchange for trading with other members of his broker association in the Deutsche Mark contract in January 1990, exceeding the allowed limits, and in February 1990, exceeding the 15% limitation on personal trading with other members of his broker association in Swiss Francs by 1%, he received only minimal discipline. The first time he was given a warning letter, the second a cease and desist notice.

Then, in an offer of settlement in which Alpert neither admitted nor denied violating CME rules, a hearing panel of the Floor Practices Committee, Financial Division found on August 1, 1991, that Alpert had violated the priority of his customer sell orders during the opening range on December 3, 1990. Specifically, he sold 16 December British Pound futures contracts for his personal account at a higher price than he filled his customer sell orders. For this he was fined $375, forced to make restitution to the client and suspended from the CME for 10 days.

However, it was the bagging of trades in the S&Ps in the late 1990s that likely turned Alpert away from open outcry trading. A special hearing committee of the CME board of directors fined him $100,000 and suspended him from the CME for a year. Additionally, the committee ordered Alpert to comply with voluntary undertakings to never again exercise his floor broker privileges at any futures or options exchange worldwide, and to never again affiliate with or have an interest in a broker association.

I guess an experience like that would leave a sour taste in anyone’s mouth about open outcry trading.

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