Antitrust suit against CME Group gets judge's go-ahead

CHICAGO Fri Aug 3, 2012 5:57pm EDT

CHICAGO Aug 3 (Reuters) - A federal judge in Chicago is allowing an eight-year-old antitrust lawsuit against CME Group Inc to go forward, reopening a particularly acrimonious chapter in CME's battle for dominance in the lucrative U.S. futures markets.

U.S. District Court Judge James Zagel on Friday threw out one leg of the suit, filed in 2004 by Eurex after the German-owned exchange made an unsuccessful bid to challenge the Chicago Board of Trade's franchise in U.S. Treasury futures.

U.S. Futures Exchange, as Eurex US later came to be known, began offering Treasury futures in February of 2004, but was never able to gain much traction.

In the lawsuit, USFE argued that CBOT and the Chicago Mercantile Exchange had interfered with USFE's application for regulatory approval, a charge that Zagel said on Fr iday he did not condone.

But Zagel said he would allow USFE to pursue two of its key arguments -- that CME and CBOT conspired to prevent the upstart rival from obtaining effective clearing services and that they interfered with USFE's relationships with traders.

USFE had obtained clearing services from CBOT's outside clearinghouse, but CBOT subsequently forged an agreement to clear its trades at one-time rival CME, preventing USFE from having ready access to an established liquidity pool for Treasury futures.

USFE in its legal filings has called this a conspiracy; CME and CBOT said it was simply a business decision.

USFE also argued that CME and CBOT kept traders away with "a campaign of threats and intimidation," Zagel's order said. That argument too will go forward, Zagel said.

Each side must present their plans for discovery on August 7, the order said.

A CME Group spokeswoman did not immediately respond to a request for comment.

CME bought CBOT in 2007, forming CME Group Inc.

USFE, which was later bought by now-failed futures brokerage MF Global, ceased operations in 2008.

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