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Frederic M.

Krieger
Aosociate General Counsel
The chicaooeurd
irk LaSalle et Van Buren
Exchange Chicago, Hanoi, 80505 312 786-7488

May 16, 1988

Laurence Storch, Esquire


Storch & Brenner
1001 Connecticut Avenue, N.W.
Washington, D.C. 20036
Dear Mr. Storchl
We are in receipt of your April 21, 1988 letter to the
Exchange. Your letter appears to misperceive Rule 6.51(c).
The Rule contemplates that the price and size of off-board
transactions, just . as on-floor transactions, will be "made
public," in the sense of providing such information to "the
tape," not in the sense of having a public file of such
information. In any event, our records do not reflect any
off-board transactions during the period October 16 through
L November 20, 1987. ,
We note that you are counsel to plaintiffs in
litigation in which the Exchange is a defendant. Unless
further communications have no conceivable direct or
indirect relationship to that litigation, we request that
further communications from your office be directed to Paul
E. Dengel or me.
Yours sincerely,

FMK/gp
STORCII & BRENNER
N. W.
LOCl/ CO2414113CTICUT AVENVE,
WASHINOTCM, D. C. 20036
MOM 4041-0000
TZLEX s3cusacio

May 26, 1988

Ill!, TELEFAX
Paul E. Dengel, Esq.
Schiff, Hardin & Waite
7200 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606

Re: Pompano-Windy City Partners, Ltd. et al.


v. Bear, Stearns Inc. & Co. et al.
Itan212=§2CIL2.910(EEL)

Dear Mr. Dengel:


On May 2, 1988, we requested orally that your client OCC
produce the Daily Position Reports and Daily Margin Reports
pertaining specifically to accounts of our clients in this
matter. You said .that you would take the matter under
advisement. We have not heard Luther from you on the subject.
Our clients are entitled to the documents we seek, apart
from whatever rights they may have in the litigation, as
customers, and as the direct or beneficial holders of the
accounts in question. Indeed, we have no doubt that the OCC has
a fiduciary obligation to our clients to produce these documents
and that its failure to do so is a willful and outrageous refusal
of its obligations. This refusal could itself form an adequate
basis for new claims against the OCC.
On May 16, 1988, Mr. Xrieger of the CBOE wrote to us that
CBOE "records do not reflect any off-board transactions during
the period October 16 through November 20, 1987." We therefore
suspect that losing trades alleged by Bear Stearns to have
occurred during that period never took place. In that event, it
would appear difficult to distinguish Bear Stearns' "absorption"
of our clients' accounts from the type of "absorption" addressed,
for example, by Ill.Ann.Stat. 0.38, §16 - 1 and similar statutes.
Paul E. Dangel, req.
May 26, 198g
Page 2

The documents we seek are directly relevant to these issues.


Failure to produce them may constitute an intentional cover-up of
serious wrong-doing and may be a basis for liability under 18
U.S.C. §2, in f er Alla, as well as civilly.
We therefore demand that the documents in question be
produced immediately.
Finally, it appears that the OCC•• CBOB, and your firm are
uniquely well-situated to know about the dubious transactions
involved. Because of this, and because of your relationship to
the options market and options offerings, you three have special
obligations to bring apparent wrong-doing to the attention of the
appropriate law enforcement and regulatory authorities.
urs sins= ely,

oel F. B v nner
JFB/pkt

frmt:dengel.ltr

bcc: Mr. Stephan J. Lawrence


cc: Files: JF3 Chron
Sp Chrot
S Chron
ACR Chron
S&B Matter No.
ot • CCITT 334 2024522)930;#
Jun.u.1 '88 15:08 SC-IFF HARDIN & WAITE P.02

SCIUFF HARDIN & WAITE


A Pattrkstvgpludint; 0006,111011 .
WASNINVON oFFIC1:
7200 Bests Tower, Chicapo,1111n014 seeps 1101 Connecticut Avenue. N. ‘N., Washington, D.C. 200:
Telephone (312) 878-1000 Tint 810-2214403 Telephone (202) 857-0800 Vox 8)-(W 04580

June 3, 1988

rigkISCPEX
P

Mr.. Noel P. Brenner


Storch & Brenner
1001 Connecticut Ave., N.W.
Washington, D.C. 20036
Ret Pornwto-Wirady City Partnere, Ltd.

Dear Mr. Brennen


I have received louts' telecopied letter of May 26, 1988. For the reasons
set forth below, 0CC refuses the "demand" that you make in your letter.
Your demand is improper because it attempts to circumvent the limitations
on discovery that Magistrate Lee imposed during the conferences on April 6, 1988 and
May 12, 1988. I informed you when I took this matter under advisement earlier that
these documents therefore would be produced only if your clients have some right to
these documents that is independent of the discovery process. My inquiries have revealed
no such independent right, and the bald assertions in your letter add nothing.
The account records that 0CC maintains are the accounts of its Clearing
Members, such as Bear Steams. The Daily Position Reports and Daily Margin Reports
that you seek therefore deal with the accounts of Bear Stearns, not with any accounts
that your clients maintain with OCC. Unless authorized by Bear Stearns or appropriately
required by court action, 0CC does not believe that it would be appropriate to provide
these reports to you. Any request for access to these reports therefor. should be addressed
to Bear Stearns, The foregoing comments should not be interpreted to mean that the
Daily Position Reports and Daily Margin Reports that 0CC provides to Bear Stearns
contain information "pertaining specifically to accounts" of your clients.
In essence, your letter demands production of these reports because you
deem them to be relevant to the lams raised by your clients' controversy with Bear
Stearns, which is the subject of the present litigation. If these documents are relevant
to the present action, they will be produced when the rulings of the magistrate so require.
However, you have supplied no reason why 0CC should or may voluntarily produce
documents pertaining to Bear Stearns' accounts absent an appropriate ruling.
With respect to the third and last paragraph in your letter, I trust that
your letter is not threatening our clients or our firm with civil or criminal exposure if
we do not comply with your demand, Our clients are not responsible for and have made
no investigation of Bear Stearns' allegations of "loving trades" or of your suspicions that
11 ••••• •■ •••■• •■• •••• •
Ir...PI • • •
V 1.0%.•

//or ...1%... .. .
• V
• WI I 0 # CCITT 034 202452.
JUN.03 'Ea 15:09 SCHIFF HARDIN & WAITE P.03

SCHIFF HARDIN & WAITE


Mr. Joel Ir. Brenner
Starch & Brenner
June 3, 1888
Page 2

those trades never took place. OCC and CBOB each have specified, but different,
self-regulatory responsibilities . under the law, The discharge of those responsibilities
is not dependent on whether 000 complies with your demand. insofar as our firm is
concerned, we are lawyers who receive specific assignments from our clients from time
to time, and our responsibilities do not include investigation of your personal aUVicions
concerning the behavior of third parties.
Sincerely,

Paul E. Dengel

cot Stephen L, Rather


STORCH 8c BRENNER
1001 CONNECTICUT AVENUE, N. W.
WASHINGTON, D. C. 20036

(202) 452-0900
TELEX 201250

June 7, 1988

VIA TELEFAX

Paul E. Dengel, Esquire


Schiff Hardin & Waite
7200 Sears Tower
Chicago, IL 60606

Re: OCC accounts held for the benefit of


Pompano Windy-City Partners, Ltd., East-Wind
Associates and Stephan J. Lawrence

Dear Mr. Dengel:


We have received your letter of June 3 via telefax. You
state in your third paragraph: "The account records that OCC
maintains are the accounts of its Clearing Members, such as Bear
Stearns." Accordingly, you conclude that it would be
inappropriate to provide these reports to us.
Your statement is not correct. The account agreements
published by OCC and entered into by OCC directly with our
respective clients state that while the accounts in question may
have been maintained y Bear Stearns, they were maintained for
our clients and were the accounts of our clients. The
agreements, which are required under Article VI, Section 3 of
OCC's By-Laws, all refer to "positions held by it [i.e., our
client] or for its account." Bear Stearns' role as Clearing
Member is to maintain the "Account" on our clients' behalf.
There are explicit references to our clients' transactions
through the account and its positions in the account.
Accordingly, any account maintained by Bear Stearns at OCC
relating to any of our clients was maintained by Bear Stearns as
the agent for that client, for that client's benefit. The agency
i
/CH 8e BRENNER

Paul E. Dengel, Esquire


/// June 7, 1988
Page 2

relationship was disclosed -- indeed its was insisted upon by OCC


-- and your firm and OCC were aware of it. We therefore request
that you reconsider the position taken in your letter of June 3,
as it rests on unsupportable grounds and is contradicted by
language published by OCC.
Insofar as our former agent, Bear Stearns, may have
instructed you not to produce the documents we seek, this letter
hereby countermands those instructions. In all matters regarding
accounts held for the entities referred to above or for Mr.
Lawrence, OCC may take instructions only from us.
The Daily Position Reports and Daily Margin Reports we seek
pertain specifically to' our clients' named accounts and
constitute the statements for those accounts; you could not in
good faith deny this, and I note that you have not done so.
Indeed, the concept of a position or margin report is meaningful
only in regard to a specific individual or firm. If you are
uncertain of this, a five-minute conversation with your client
would clear it up.
As to the last paragraph of our letter of May 26, regarding
civil and criminal liabilitiy resulting from the intentional
cover-up of fraudulent transactions, we will let it speak for
itself. Your response to it, denying that your clients have made
a relevant investigation or have an obligation to do so, appears
inaccurate, however. We remind you that your clients OCC and
CBOE have SRO responsibilities. We remind you that your client
OCC has a "Daily Options Clearing Corp. Compliance Tape"
specifically designed to recognize fraudulent activities. We
remind you that your client CBOE has in fact conducted an
investigation sufficient to have stated in a letter to us dated
May 16, 1988 that "[its] records do not reflect any off-board
transactions during the period October 16 through November 20,
1987." Apropos of the last point, we enclose reports by Bear
Stearns for October 23, 1987 (for example) purporting to show
"liquidating private sale" transactions effected by Bear Stearns
from Pompano's OCC account to an undisclosed Bear Stearns
account. These transactions were accomplished through "journal
entries" that appear fraudulent in that they reflect post-dated
non-market prices. In view of the positions taken by you, it
//CH & BRENNER

Paul E. Dengel, Esquire


June 7, 1988
Page 3

appears that OCC nevertheless consented ) to and effected the


transactions in question, thus knowingly participating in Bear
Stearns' fraudulent scheme and violating its fiduciary and
contractual obligations to our clients, the terms of the Option
Disclosure Document ("ODD"), the terms of the purported
"Prospectus" you supplied to us, and federal securities laws,
including the antifraud provisions.
You are too modest about Schiff Hardin & Waite's role in
these matters. Your firm expertized the "Prospectus" which, it
now appears, may have been written intentionally to exclude the
purchase of options-write transactions from its scope,
notwithstanding the terms of the ODD. You have not responded to
our written query of May 5,, 1988, about whether your firm takes
the position that they are so covered. The OCC's co-defendants
may find that this issue merits their attention, since if options
writing transactions are not covered by the "Prospectus," then
they will apparently have participated in widespread violations
of the securities laws, including the antifraud provisions, and
would face substantial liability either primarily, or secondarily
as Participating Organizations and controlling persons of the OCC
and under the indemnity agreement. Your firm would not appear
uninvolved in such violations.
Your clients' reckless or intentional disregard of their
duties to undertake a full investigation of the activities of the
Bear Stearns defendants, and OCC's refusal to produce documents
pertaining to our clients' accounts, is consistent with a
deliberate policy to cover up serious malfeasance by them and
their co-defendants. That such a policy appears to be in place
is evidenced by the letter form Mr. Hender of OCC to Mr. Wilson ,

of NASD, dated May 9, 1988 stating that "it would be unwise for
defendants to engage in disputes among themselves at this stage
of the proceeding regarding indemnification rights." We do not
believe that a jury will ignore such evidence.
Schiff Hardin & Waite has obvious conflicts of interest
between itself and each of its clients, who themselves have
conflicting interests. Ordinarily such conflicts would be no
concern of ours. Here, however, where the conflicts appear to

1 See, OCC By-Laws, Article VI, Section 1, which states:


"All exchange transactions shall be cleared through the
Corporation, and no other transaction shall be cleared through
the Corporation without its consent."
7
/TORCH 8C BRENNER

Paul A. Dengel, Esquire


June 7, 1988
Page 4

affect OCC's ability or willingness to meet its fiduciary


obligations to our clients -- obligations to investigate and to
produce documents -- we object strenuously to them. Based on our
review of the OCC's history, it appears that Schiff Hardin &
Waite was present at the creation and has played a unique and
important role in OCC affairs since then. Your professed lack of
knowledge of OCC's standard account agreement, combined with
your statement that you (Schiff Hardin & Waite) are merely
lawyers who follow specific directions, could be viewed as an
attempt to disguise or minimize your firm's significant potential
liability by projecting an image of ignorance in matters basic
to the case. This course of conduct appears designed to minimize
Schiff Hardin & Waite's potential liability to the OCC's co-
defendants as well as to plaintiffs.
We reiterate our formal demand for the Daily Position
Reports and Daily Magin Reports and urgently request that you
reconsider your refusal to produce them. We also reiterate our
request that you state the OCC's position on whether its
purported "Prospectus" covers the purchase of options-write
transactions. Please advise at your very earliest convenience.
Yours sincerely,

Joel F. Brenner

JFB/pkt
Enclosures

cc: All Counsel


SCHIMULE A aF ?CFM CA-1
71 01 ray- , of Registrant as stated in Item = of 7orm :A-1.
1. THE OPTIONS CLEARING CORPORATION
Item of Form
fTda*ti ,-'7) Res,:cnse
liquidations, plus any fees or charges owing to
OCC from the suspended Clearing Member, should
exceed the amounts available to OCC in the
Suspended Clearing Member's Liquidating
Settlement Account to offset such Liabilities
(consisting of cash margin deposits of the
suspended Clearing Member, amounts realized by
OCC from the liquidation of non-cash margin
deposits and from issuers of letters of credit,
amounts realized by OCC upon liquidation of long
option positions on which OCC had a lien in
accounts of the suspended Clearing Member, and
the suspended Clearing Member's contribution to
the Clearing Fund), a loss in an amount equal to
the excess would be sustained. Such loss would
be subject to reimbursement out of the Clearing
Fund unless OCC elected pursuant to Article
VIII, Section 5(b) of the By-Laws to charge such
loss in whole or in part to OCC's current
earnings, and would be reduced by the set-off of
any amounts owing from OCC to the suspended -
Clearing MeMber and any recovery from such
Clearing Member.

2. OCC might also sustain a loss in the event of


fraudulent or other criminal conduct by a
Clearing Member, to the extent that losses of
such a nature are not covered by insurance.

5(d) (ii) 1. OCC maintains a Clearing Fund, in accordance


with the provisions of Article VIII of the OCC
By - Laws and Chapter X of the OCC Rules, as
protection against the types of losses
enumerated in Sections 1 and 5 of Article 7111
of the OCC By-Laws.

2. Chapter VI of the OCC Rules requires thd , deposit


of margin, on a daily basis, in respect of each
short position (including short positions to
which exercise notices have been assigned,
pending exercise settlement) maintained with OCC
JAN-17-10 MON 19:50 COLE CORETTEgrABRUTYN P.02

Law ()Hi co

E CORE 1 '1 E & ABRWYN Memorandum


A rrtdessiona I Corporation

To: 2100-1
From: Mark A. Cymrot C4f4(
Date: January 17, 1989
Subject: Lawrence v. Bear Stearns

I had a telephone conversation today with Paul Dengel to


follow up on our settlement discussions.
We agreed that the discussions could not be used by either
party as an admission. We said that he understood the
information would "enter into our collective memories" and might
provide a "road map" for discovery, but they would not be the
basis of a question at a deposition or some other similar use.
Based on prior conversations, our discussions have been
proceeding on the basis that he would make representations to us
about facts (i.e. the first step). If we felt that those
representations provided a basis to settle, then he would provide
evidence which could be admitted in a court proceeding to support
the representations (i.e. the second step.)
We had previously discussed three questions:
1. What role did 0CC have in the transfer of the Pompano
accounts to Bear Stearns;
2. What knowledge did 0CC and CBOE have concerning the
actions BS were taking with respect to the Pompano accounts;
3. What is CBOE's interpretation of its arbitration rules,
particularly Sec. 18.1(d).
We previously had questioned Mr. Dengel on the basis for his
assertion that OCC could rely upon instructions from clearing
members. He pointed to the following authority for his position
and said:
1. Combined Market-Maker Agreement - which says
(according to Mr. Dengel) that the Clearing Corporation is
authorized to rely on notices by the clearing member or other
persons. This includes notices to transfer accounts.
JAN-17-10 MON 19:50 COLE CORETTE&AERUTYN P.03

-2-

2. By-Laws - Art. 6 - Sections 12(f) and 13(f) set forth


the conditions under which long and short positions can be closed
out. In substance, short positions remain in force until
transferred to another account at a clearing member or another
clearing member.
Under 0CC rules, transfers of positions can be authorized by
the clearing member. The OCC does not examine whether the
transfer is in violation of any contract or rules that apply
between the clearing member and its customer. From the OCC's
point of view, the positions are the property of the clearing
member. 0CC does not have to be aware of or deal with anyone
other than the clearing member otherwise it cannot operate.
3. Art. 6 - Sec. 9(c) - provides indirect authority,
Dengel says. It says the registered owner is the clearing
member.
4. Art. 6 - Sec. 3(c)(iv) - gives the clearing corporation
authority to close a market-maker account without giving notice.
This section applies only between the OCC and the market-maker,
It does not apply to BS's obligations.
Dengel says that OCC only has to deal with the clearing
member and not with the market-maker. An instruction which is
contrary to the agreement between the clearing member and the
market-maker is not the business of the OCC. The OCC can rely
upon the instructions of the clearing member and would not know
what other agreements applied to the transaction.
I pointed out that an action which is otherwise lawful may
become unlawful if the person knows that the action is part of a
scheme to defraud. In other words, if 0CC carried out
instructions while knowing that BS was defrauding Pompano, OCC
would have participated in the fraud.
Mr. Dengel said that he was aware of that theory. He said
that he had checked with those who he thinks should have known of
the problem if anyone at 0CC knew - the people who assessed risk
at OCC.
1. He said that no one to his knowledge had information
about BS's problem with Pompano or its other market makers during
the week of October 19-26.
2. He said 0CC was looking at position risk - which
clearing members would have problems if the market went the wrong
way. BS did not show up on these status reviews.
3. The people he spoke with said that they had no
conversations with BS about its own positions or the positions of
the market makers.
—Tic:N-17-10 MON COLE CORETTE&ABRUTYt4 - 04

-3-

He said that if we decided to proceed to the second step of


the discussion that he would have to prove these facts to us and
provide names and documents.
On the question of what happened to the Pompano positions,
he said that the positions moved as follows:
1. The positions originally were in a BS combined market-
maker account. This account held the positions of all BS
market-makers but the positions could be identified by account.
2. OCC received instructions to transfer about 20
different accounts in BS combined market-maker account to a BS
market-maker account where the accounts could not be separately
identified. The people at OCC who perform this function would
not know which accounts were being transferred unless they
checked the acronym.
3. Several days later, OCC received instructions from BS
to transfer the accounts from the BS market-maker account to a BS
proprietary account.
He said that he had the information as to how BS closed the
Pompano positions. It took some time for OCC to track what
happened once the positions were transferred out of the first
account. In the first account, the Pompano positions were
separately identified. After the transfer, OCC personnel had to
trace what occurred.
Mr. Dengel said he considered it part of the second step of
the negotiations for him to tell us what happened to the
positions.
I asked him who was overseeing the market going to hell and
what did they know about the Pompano situation.
He said that the CBOE was not the DEA for BS and therefore
was not monitoring BS's capital during the crash. It was too
busy trying to keep up with those it was responsible for.
Mr. Dengel said that he talked to the CBOE financial
compliance office which said that he had had no contact with BS
during the week of 10/19 to 26.
He said that the CBOE reviews the transactions of its
members. This review is done through a "focus report". This is
a historical review and was the lowest priority during the
crisis. The CBOE will, review whether a member traded while in
deficit which is against the rules. But this review will be made
long after the fact.
,T ,,, N-17-10 MON 19:2 COLE CORETTE&ABRUTYN P.05

-4-

He said no one at CBOE was dealing with the Pompano


situation during the crisis. They learned of the Pompano close
out in the papers. They also were not following BS problems with
its other market-makers.
Mr. Den el said that CBOE and 0CC were willin•to re resent
yRp_zomethsact,ts?nthatBStooLcinta}g
thatthedidnotar cinthe
nawcsojrlts1.dnotrati
Por natarylti neafter
the fact. He said that b exercisin•instructions from BS 0CC
dial not approve or ratifK BS' actions.
On the issue of arbitration, CBOE says that Sec. 18.1(d) is
not a substantive provision. It reserves the members right to
proceed in federal court if the member otherwise has the right to
proceed in federal court.
By virtue of being a CBOE member, Pompano did not waive its
rights to proceed in federal court for securities law claims.

I told Mr. Dengel that we would analyze what he had said and
get back to him.
cc: Steve Lawrence
Roger Colaizzi
STATEMENT BY THE OPTIONS cLzARTNG conrommIN
' AND ciacAao BDA ,D OPTIONS EXCHAN04,'INC.

14 Pompano-Windy City Partnere, Ltd. ("Pompe6") was a


market maker pursuant to Emc Rula 1503‘.1(a)(6),' 17 CFR
1240.150.1006), and cleared through The Optioni s Clearing
Corporation ("OCC") Clearing Member Bear Stearns. I Secause of
Pompano's market maker status, its potations were identifiable at
0CC by the ACronyms of Pompano's traders. Pompailo"s' . option
oontraots were maintained by Boar Stearns, under the .acronyms of
Pompano's traders, at OCC in a combined market makers' account
pursuant to OCC By-Laws, Article VI, Section 3(c).
2. OCC has determined that no tradesli offsei or closed
out the options petitions, that were in the Pompano aocoUnts on
October, 23, 1987.
6
4. . The rules and by-laws of 0CC and ME prov;.deifor the
assignment of exercise. notices for index options, including the
type traded by Pompano. In accordance with those roes and by-
lawss, exorcize rioticep may be assigned to market MakOra who lire
writers of listed options. A market maker options Writer only
becomes obligltod pursuant to an exercise assignmiant in the
following wayt -,
a. occ assigns an exorcise notice to !a Clearing
Member by the market maker's acronym in respect o the short
positions maintained in the Clearing Member's combined market
makere 0 account; and
b, Upon receiving notice of the assignment, the
Clearing Member settles directly with OCC in respoct of the
assigned options Contract) and
el The Clearing Member both notifies t$e assigned
market maker of the assignment and settles directly with the
market maker, making the appropriate adjustments to' the market
.

maker's account taintaited at the Clearing Member.


4, CCC has determined that there wore no ass 11. gnments of
exercise notices to the Pompano acronyms subsequent to the close
of business on October 22, 1987. c5OE (as it pertains to trades

The term "trade" means a transaction for value.


2/ The applicable 000 and CO
BZ rules, by - laws, arid; procedures
specify the technical procedures for the easignment bt exercise
notices. The steps enumerated describe the general proCodure
under OCC
- 2 -

on Ca0E) and CDC have also determined that no tradOs occurred


through the Pompano acronyms subsequent to the close of business
on October 22o 1087.
AfligligarpiAm4 :4, 4.04,/ f ino options
posithne were carried in the hear stearne combined Market maker
account with OCC under the Pompano acronyms, and Ocp therefore
could not have assicrned exercise notices to that Bear Stearns
account Under the Pompano acronyms.
O. Atter the expiration date options betome valueless. If
attar the expiration date, the market maker options 'writer has
not become obligated by assignment of an exercise notice as
described in 13 above, the market maker options wrIter cannot
thereafter become so obligated,

Dated February 28, X989

yt anoy R. Crossman By Don L. Horn to


First Vice.-President and senior Vice-Preside
General counsel General counsel
Chicego Board options The Options Clearing
Exchange, Inc. corporation
17:=4 FROM COLE CORETTE kERLITYN TO 1212935:S58e H.U .2

Home Address
11 Island Avenue
Apt. #1204
Miami Beach, FL 33139

VITAE

Mr. Leon Pomerance

Senior Vice President - Drexel Burnham Lambert, Inc.


Founding Director - Chicago Board Options Exchange
Chairman - Chicago Board Options Exchange (1973 - 1976)
Founder and President - Options Division Sedurities Industry
Association
Founding Chairman - National Association of Securities Dealers
National Option Committee
Creator of options Course - New York Institute of Finance
Pomerance Prize - created by the Chicago Board Options Exchange
in his honor - a cash award is given annually
to a graduate student doing original research
in options.
Arbitration Panel - New York Stock Exchange and National
Association of Securities Dealers
1982 was Mr. Pomerance's 50th year on Wall Street
Retired March 1, 1988
NOV-3U-1990 17: 35 FROM COLE CORETTE ABRLITYN TO 12129353588 P.03

Background
The Pomefohoe Prize for Excellence in the Area of Options Resedfch was established
Decemoe. 1976 in reco9nIton of Leon Porheronce's irnfreosuroble COntribUtiOn tO t*.
creation and development of the Chicago Soora Options Exchange. One of the wolbs
foremost outhorities on 00, 10r5 S. Mt POrneOnCe served since Peon1drv.1472 on the fOundihg
Bacro of Directors ono from jonvoty,1474 to December. 1Q76 as itS ChaInnon

Award
An Qwaro of S1. J) in cash will be given onnuo!ly ay the Choopo Board Options Excnonde
for rite most autstoncitng cornoietea stuay on :re market fcc elChOnce-tracSeal crotions

Topic
he stvc;./ must hove as its subject the market fry exchonae-tradea actions Studies
-

suorritte,p fpf the awcro troy deo' With any csceCt of t!" ..e market for exchonge-'tobest
options in :ne fljtvre. the exchange Moy onncunce C SpeCifIC ootons tesedt9 - aac
for which the ct,woro wtit gve.n
COLE CORETTE a ABRUTYN TO 12129:5:588 P.04

Eligibility
t\Arr,bet, 5 of th•?. 000e9mie dne fin-n -'i'l cornr -nunify, and ,7",•!he .r119/e3teC1 idrvidtjc 15 ofe
iriv,id .o st_ibrnIt oOli iior and stu44,:es tEscthivr? ,7:ans,aefal ,ry-, a sl ■ jav cc
ff-v? n-lockef fin( exCnOnqc.‘ 40de..7./ Ci1Of ,Onii 5 1, )•:.".95 rriOy Of Or)? le , th
Inatviavol; who ofe eror_t,foyeesC roetTit:;.,Fis of fhe °•ot -2g? ?..t-:!-Yri Exchf:3fge
ofe f-torninees of rn.q..rnt4 , Cvq0nric,31•cen5 arc? not Optio In ed,Ititicri, 51 ,,Khe.s which hove
been r,utolished Or1e 0 Decernte , . 1Q7' are 1'0 1 efigt 19

Review
SluCres suhrhilleC, tOr thi? ("wCro will 17,:• A,E,...&■,Jalc,,,ci 17)y !he Porrierchce Prize r:e,view comrn t nee
-

Ths.Cammlite..ewill cons. 5tf rnernb..e.r ,s cet the ocaaen-w: cornrl,unitv wotlexperitse inIhe
fieltJ of ocqlOhs end rn ,:?rnbefs of the Exchange

Deadline
Apr,haolions cr0 subrn , ssions for the °wore)
teceivej y SePlembef 30. 17.;'80

Announcement
ihe tcs.c.iolent (74 Ile 0,,,ord w ill be onnbunceb in December. 1980
4 tc Dates t ubseavgrd en./C1 OwOrds will be OnnrrAinCerect at !hot time.

Publication
A' :tS discealic•,..t • 11 ChICoo kY3Ifj reserves the right to publish ona
oistott.,. • ,!cf e nix 4,2ef rf cc.17,r.=.sf ttlp 51t}triY Ot a SUmmOry Of Or exceffofSrfOrn
the SlUdY 10 the ExCh0t )Qe rhPrrtefship arc, of her interestedc.tivicluols

Past Awards
- pecte.5,74 1eet.e9., tje ■ Iversitv Tests of Mork& Effioiend:y of the Chloog0
Board Options Exchorve.

tvlorK E C>utrenein U Ityrsity c.01,timir.) at Er.,, keie- , Option Pacing A Simplifiedpt0Och,

• rft-leSVS r7c...b?41 C."`I P.: -/*‘? - Idlorso 1 ilvels , fy


Pu t - Can Pority and Market Efficiency.

TOTAL P.n4

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