Financial History 140 Winter 2022 - Page 13

that he prepared for this event . It was a most difficult assignment , given the nearly 50 years of my leadership at the Chicago Mercantile Exchange , now known as the CME Group .
I began life as an escaped child from the Holocaust . I was seven years old . Our incredible escape was due to a great deal of good luck , coupled with the brilliance of my parents , who had the insight and courage to leave everything behind and miraculously outwit the Nazis and the KGB . It was an odyssey that in two years spanned three continents , six languages , the Trans-Siberian Railroad and Japan , courtesy of a life-saving transit visa from Japanese Consulate General to Lithuania , Chiune Sugihara .
Given this history , the achievements in finance that I carried out take on even greater meaning . One must never lose sight of the fact that it was here in the US — the land of the free and home of the brave — that this refugee from Bialystok , Poland , without American roots , without wealth , without clout or influence was given the opportunity to enter the world of futures markets and climb to the top of its complex structure . This would never have been possible in any other country .
To understand how and why this came about , one must recognize that the American Dream , the American free market ideal , is not simply an economic principle giving an individual the right to produce goods and services without coercion or government intervention . Instead , as I state in my most recent book , Man of the Futures , it encompasses a whole way of life and social philosophy : ethics , moral values , jurisprudence , ideas and a way of life . Indeed , capitalism is embodied in the American free market ideal . They are one and the same . At its core is liberty : the right to act pursuant to one ’ s judgement , the right to confront ancient truisms , the right to examine new ideas , to experiment and explore , and even to fail without the stigma of failure .
Yes , it was the free market ideal that gave me the courage as chairman of the CME in 1970 to question why futures markets were limited to agricultural commodities . When I dared propose to my Board of Directors the idea of currency futures , they laughed me out of the room . They told me I was a lawyer and not an economist , so I did not understand why . No , I did not . I saw just the opposite . Financial products needed futures to hedge their risks , to protect their profits . When I posed the question to Milton Friedman , he said it was a great idea . The rest , as they say , is history . The idea grew exponentially . Nobel laureate Merton Miller said that I ushered in the modern era of finance .
But I was not finished . I was breaking some additional ancient truisms . In 1986 , I perceived the technology that was coming . I said to our members , “ Anyone who has not seen the handwriting on the wall is blind to the reality of our times . The markets of the future will trade by way of the screen . Those who dare ignore this reality face extinction .”
It was heretical . I had death threats . I needed a police escort . But I would not surrender my belief . I spent the following 15 years preaching technology to the world . Globex , the Merc ’ s global electronic transaction system , is one proud result . The world markets followed . So I am grateful to the Museum of American Finance for recognizing some of my achievements . Thank you .
BOB PISANI Senior Markets Correspondent , CNBC
Those were such inspiring remarks from Leo Melamed . What a wonderful leader . One of the central figures in American commerce and trade . It ’ s obvious why he ’ s referred to as the “ father of financial futures .” And what a wonderful tribute by his son , Jordan , in that beautiful introduction .
Now tonight we celebrate two icons in electronic commerce who took us into a new world . Two men who have incredible personal stories . Who overcame all odds to succeed and to lead . Who dared to define their own futures .
Tonight , we honor Thomas Peterffy with the Museum ’ s Lifetime Achievement Award . This is only the second time this particular recognition has been awarded to an industry legend at the Museum ’ s Gala . Thomas is the embodiment of the American Dream , an immigrant who came to this country with little means , no command of the English language and through talent , perspiration and vision built an incredible company .
Born in the midst of World War II , Thomas emigrated here in 1965 and was an early adopter of computers for an engineering firm that he was working at . He wrote code and then in 1977 bought a seat on the AMEX to trade options — becoming the first to use computer-generated daily valuation sheets . That was a true technological breakthrough .
A constant force for automation to replace inefficient manual systems , Thomas created the predecessor of Interactive Brokers with four employees — and the rest is history . Interactive Brokers currently employs 2,400 people . It ’ s got close to $ 10 billion in equity capital and conducts business in 135 markets . As anyone who is a client of Interactive Brokers knows , it is continually hailed as the best discount brokerage platform in the United States by Barron ’ s for its elegance and ease of use . Thomas stepped down as CEO of Interactive Brokers in 2019 , and he remains on its Board and majority shareholder .
I have known Thomas for many years . He has been a source of great wisdom . And , just as important , he ’ s a man who makes himself accessible when I ’ ve needed details or information on some aspect of trading for stories I ’ m working on for CNBC . He ’ s one of the great experts in the field and not just someone who sits up in an ivory tower . He very much knows the details of how the markets function , and how they are put together . For over 50 years , he has been at the forefront of applying computer technology to automate trading and brokerage functions . He truly exemplifies tonight ’ s theme . As a friend and admirer , I am honored to introduce Thomas Peterffy — an extremely worthy recipient of the Museum ’ s 2022 Lifetime Achievement Award .
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