New podcast uncovers '80s FBI sting at Chicago Mercantile Exchange
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In the late '80s, undercover FBI agents infiltrated the pits of the Chicago Mercantile Exchange, chasing tips of alleged fraud and rigged trades that skimmed money from investors.
Driving the news: A new podcast called "Brokers, Bagmen, and Moles" tells the story of the sting, the traders who watched it go down, and who eventually took the fall.
Backstory: Chicago native, former derivatives trader and Hollywood executive Anjay Nagpal hosts the 12-episode podcast as the first offering from his new media company Entropy.
The inspiration: While working at the Merc 20 years ago, Nagpal was haunted by lingering questions, like:
- "Why was this financial market full of people who weren't educated in finance?
- "Why is a place that trades mostly financial products regulated by the Senate Agriculture Committee rather than the SEC?
- "And why did everyone seem to know each other from birth?"
Biggest surprise: The lack of history on the operation. "To this day it's not listed on the FBI’s website, or even on Wikipedia," Nagpal tells Axios.
- "Not one prominent trader or exchange official was indicted on wrongdoing … while smaller traders were clearly fall guys."
- And Nagpal was shocked by "how blatantly and mercurially the heads of the exchanges manipulated politicians and federal regulators to maintain inefficient regulation."
The aim: "For people to be entertained … but also to learn something. In this case, how financial markets work, how the FBI works, how markets are regulated, and to show how important our country's financial markets are to so many industries."
The bottom line: More than anything, Nagpal wants to show how the Merc "had the most interesting and funny people in the world working at it."
- "It's also my love letter to Chicago, which will always be my home and a place I miss dearly."