Financial Journalist Greg Burns Recalls Reporting on the Evolution of the Chicago Exchanges

Jun 10, 2024

John Lothian

John Lothian

Executive Chairman and CEO

Boca Raton, FL (JLN) – JLN spoke with veteran financial journalist Greg Burns at the FIA Futures Industry Conference in Boca Raton for John Lothian News.

Burns talked about how he got into journalism and what reporting on the exchanges was like in earlier days. He said he had been involved in journalism ever since high school – he went on to get a graduate journalism degree – but covering the futures markets came as a surprise. 

His friend Andy Yemma at the time was the business editor of the Chicago Sun-Times, and Yemma took a chance on Burns. He started out in the retail beat, reporting on department stores like Marshall Fields and Carson Pirie Scott but he soon changed to covering LaSalle Street – the “premier beat” at the paper at that time. 

Burns talked about covering the FBI’s investigation of the Chicago exchanges in the 1980s. No one at the New York Times or the Wall Street Journal wanted to touch the story, so Burns and a reporter named Charlie Nicodemus were almost the only ones to work on it, Burns said.

He was barely on the beat when the investigation happened, so he learned a lot about futures and options very quickly. He said he is grateful to Tom Cashman and many others who took the time to explain the business to him. He was also helped by an options course at the Cboe and by reading a lot. 

He got a sense of the in-house competition at the Chicago Mercantile Exchange (CME) early on, when Jack Sandner, Leo Melamed, and Bill Brodsky were active at the exchange. He said Sandner and Melamed were close friends to begin with but eventually became bitter rivals. 

At the Chicago Board of Trade, “there were generations of families there,” Burns said, “Almost everyone was practically born into the exchange.”  It was “a very Chicago institution.”  But Karsten “Cash” Mahlmann, who was the CBOT chairman for a time, was from Germany and was an anomaly in some ways, Burns said. Nevertheless, he was a very effective leader there and well respected, Burns added. “Until things blew up for him too, for his trading firm.”

Burns also talked about the leadership of Tom Donovan, saying he had the authority at the CBOT to get things done, but was also under a lot of pressure. “When the Board of Trade’s basement flooded with water, Tom was the one who got the Chicago Fire Department to come and bail them out,” Burns said.

He said the story of the exchanges back then was their incredible growth and how “they didn’t feel legit and had a chip on their shoulder. New York was really still the center of finance, but that was shifting and the exchanges were very dynamic” in launching new products and innovating, he said. 

Burns remembered some of the people whose stories he covered for the Chicago Tribune, including Lewis Borsellino, who was famous in the S&P 500 pit for getting into trouble for fighting.  Burns said he saw Borsellino’s name over and over in the list of traders being fined for misbehavior. “I met him and he turned out to be a really nice guy,” Burns said. “He said, ‘You’ve got to stick up for yourself in the pits. They don’t like me here but they respect me.'” 

Burns said he remembered when night trading became a big deal at the CBOT because they wanted the Japanese market for treasuries.  “Really, the story of the ’90s was the advent of electronic trading, how Globex caught on and then overtook and replaced the pits.”

Traders had the reputation of being a very fast crowd, Burns said, “but the reality was I could count on one hand the number of people who tried to mislead me. Which is not true of other industries I’ve covered. I didn’t get lied to and people were pretty open.”

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