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Vanity Fair’s Trump Trade Story Is ‘Nonsensical,’ Says Exchange CEO

Vanity Fair’s Trump Trade Story Is ‘Nonsensical,’ Says Exchange CEO

(Bloomberg) -- The head of the exchange where, according to a Vanity Fair article last week, a cabal of investors suspiciously earned billions of dollars by trading before market-moving news says the transactions didn’t happen.

The article’s thesis is built atop a faulty reading of the trading record, said Terry Duffy, chief executive officer of CME Group Inc. He said it mistakenly summed up all volume for those derivatives during spans of time and implausibly attributed that buying and selling, spread across thousands of transactions, to a single bad actor or group of cheaters.

“It’s the most irresponsible thing I’ve ever seen in my entire life,” Duffy said during an interview Wednesday in his Chicago office. “Listen, I’m not sticking up for anybody. But the way they calculated that was so nonsensical. The article should’ve been written in crayon.”

Duffy didn’t rule out that market-moving information could be leaking from the White House. He just doesn’t think Vanity Fair proved that. The article prompted calls from some Democratic lawmakers for an insider-trading probe.

Duffy is not the first person to criticize the story but he’s the most authoritative one to respond to the allegations given that e-mini S&P 500 futures -- the contracts in question -- are only traded at the exchange he leads. The article has been met with widespread skepticism from the financial services industry, while CME said in an Oct. 18 statement that the allegations are “patently false.”

The author, William D. Cohan, stood by the article when reached Thursday.

“When you speak with people who have been trading 40 or 50 years, people trading e-minis as long as they’ve been around, and it goes against their gut instinct, you get the numbers, you see the timing more or less lines up, you write a story,” Cohan said. “I’m sorry it’s upset Mr. CME and he’s calling me a child, but you know we’ve got senators now who are calling for an investigation. Let’s let regulators do their job.”

--With assistance from Michael Hirtzer, John Hughes, Kim Chipman and Sarah Ponczek.

To contact the reporter on this story: Nick Baker in Chicago at nbaker7@bloomberg.net

To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Flynn McRoberts, Jenny Paris

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