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Mahlmann re-elected CBOT chairman; fraud overshadows election

CHICAGO -- Chicago Board of Trade Chairman Karsten 'Cash' Mahlmann was elected to a fourth consecutive term as chairman of the world's largest futures exchange, despite a strong challenge from former CBOT Chairman Leslie Rosenthal, CBOT officials announced late Tuesday.

Mahlmann edged Rosenthal 630-524 in balloting by exchange members.

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Mahlmann's election was overshadowed by an FBI investigation into alleged fraud at the CBOT and the Chicago Mercantile Exchange, the world's second-largest futures exchange.

Eighteen traders and a clerk in the CBOT soybean pit and three traders in the CBOT Treasury Bond pit were among 47 people indicted last year on charges ranging from racketeering and fraud to making false statements to federal agents.

Rosenthal had been critical of Mahlmann's handling of the matter, suggesting he could have done more to shield the exchange from the fallout and polish the CBOT's tarnished image.

'There are those who feel it would just be a good idea to get in a fresh face,' said one longtime CBOT member. 'It's not a question of Cash doing anything wrong. It's just a feeling by some that a new chairman would signal a fresh start and help put the problems of the past behind us.'

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The fallout from the fraud case, however, was expected to linger through the year, with trials of indicted traders set to begin this spring and summer.

Mahlmann has been a member of the CBOT since 1963 and is currently chairman of Stotler Group Inc., a major trading firm.

He served as a member of the exchanges' board of directors from 1983 to 1985. He became vice chairman of the CBOT in 1986.

He was elected to his first term as chairman in 1987 and was re-elected to one-year terms in 1988 and 1989.

Rosenthal has been a CBOT member since 1958 and is currently managing partner of the Rosenthal Collins Group.

He was first elected to the exchange's board of directors in 1974 and served as vice chairman in 1979. He was elected to consecutive terms as CBOT chairman in 1981 and 1982.

Rosenthal was elected to the Board of Governors of the Board of Trade Clearing Corp. in 1975 and served as its chairman in 1978 and 1979. In 1978, he also joined the board of directors of the MidAmerica Commodity Exchange, a CBOT subsidiary exchange.

William F. O'Connor, chairman of O'Connor & Co., was elected vice chairman.

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Elected to three-year terms as full-member directors of the exchange were: Patrick H. Arbor, vice president, LIT America, Inc.; Charles P. Carey, Jr., independent trader and floor broker; Daniel C. Henning, president and partner, Henning and Krajewski Trading, Inc., and Paul L. Krug, Jr., vice president, Continental Grain Co.

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