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Congressmen seek probe of trading on Chicago Mercantile Exchange

SHARE Congressmen seek probe of trading on Chicago Mercantile Exchange

CHICAGO (AP) — Three congressmen are asking federal regulators to investigate allegations of trading irregularities at the Chicago Mercantile Exchange.

Their request follows reports that some traders in the NASDAQ 100 stock-index futures pit may have used pagers to give each other advance warning of major buy or sell orders. Such orders could cause fluctuations in the market, and traders with advanced knowledge could easily profit.

Exchange executives have called the reports "unsubstantiated rumors."

Reps. John Dingell, D-Mich., Edward Markey, D-Mass., and Edolphus Towns, D-N.Y., signed the letter sent Thursday to the Commodity Futures Trading Commission and the Securities and Exchange Commission asking for an investigation.

"We believe it is no coincidence that the timing of this letter coincides with extensive political activity," said Craig Donohue, a managing director at the Mercantile Exchange.

Some officials at the exchange believe the congressmen's letter was motivated by opposition to a proposal by the exchange and the Chicago Board of Trade to lift regulations that apply to futures trading and to allow trading of futures contracts on individual stocks.

The SEC, which oversees the stock market, declined comment.