Chicago Options Associates (COA) is a finance company in

Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = List of sovereign states, Count ...

Illinois Illinois ( ) is a state in the Midwestern United States. Its largest metropolitan areas include the Chicago metropolitan area, and the Metro East section, of Greater St. Louis. Other smaller metropolitan areas include, Peoria and Roc ...

which specializes in trading options and

futures contract In finance, a futures contract (sometimes called a futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset ...

s. It was founded in 1987 by Oliver R. W. Pergams and Michael E. Davis. In 1994 Davis was its

chief executive officer A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especial ...

, hiring then-graduate student

Jimmy Wales Jimmy Donal Wales (born August 7, 1966), also known on Wikipedia by the pseudonym Jimbo, is an American-British Internet entrepreneur, webmaster, and former financial trader. He is a co-founder of the online non-profit encyclopedia Wikip ...

as research director; Wales served in this position until 1998. The company and Davis were the subject of

litigation - A lawsuit is a proceeding by a party or parties against another in the civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. The term "lawsuit" is used in reference to a civil actio ...

resulting from a 2007 Illinois Supreme Court decision. In ''Dowling v. Chicago Options Associates'', plaintiff Brian Dowling successfully sued the company (and Davis), winning a judgement of US$817,830.45 from both defendants. Davis tried to shield his

assets In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can b ...

by transferring funds to a law firm, DLA Piper, which had assisted him in buying a home in

Florida Florida is a state located in the Southeastern region of the United States. Florida is bordered to the west by the Gulf of Mexico, to the northwest by Alabama, to the north by Georgia, to the east by the Bahamas and Atlantic Ocean, a ...

. During this representation, Davis paid a retainer of $100,000 to DLA Piper; Dowling maintained that he was owed this money. Although the

circuit Circuit may refer to: Science and technology Electrical engineering * Electrical circuit, a complete electrical network with a closed-loop giving a return path for current ** Analog circuit, uses continuous signal levels ** Balanced circu ...

and appellate courts agreed with Dowling, the Illinois Supreme Court reversed and found with DLA Piper. The

Illinois State Bar Association The Illinois State Bar Association (ISBA) is among largest voluntary state bar associations in the United States. Approximately 28,000 lawyers are members of the ISBA. Unlike some state bar associations, in which membership is mandatory, ISBA mem ...

and Chicago Bar Association filed '' amicus curiae'' briefs in the case, favoring the law firm's position. This decision by the Illinois Supreme Court was the first time the concept of "advance payment retainer" was recognized in the state, and the court codified its ruling into a 2009 regulation affecting legal practice in Illinois.

History

Options and futures trading

Chicago Options Associates is a finance company incorporated in

Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = List of sovereign states, Count ...

which specializes in trading options and

s. It was founded in 1987 by Michael E. Davis (a 1983 MBA graduate from the

University of Chicago The University of Chicago (UChicago, Chicago, U of C, or UChi) is a private university, private research university in Chicago, Illinois. Its main campus is located in Chicago's Hyde Park, Chicago, Hyde Park neighborhood. The University of Chic ...

) and Oliver R. W. Pergams, who received a

bachelor's degree A bachelor's degree (from Middle Latin ''baccalaureus'') or baccalaureate (from Modern Latin ''baccalaureatus'') is an undergraduate academic degree awarded by colleges and universities upon completion of a course of study lasting three to six ...

from that school in 1981. The company originally had offices in Chicago and

Philadelphia Philadelphia, often called Philly, is the largest city in the Commonwealth of Pennsylvania, the sixth-largest city in the U.S., the second-largest city in both the Northeast megalopolis and Mid-Atlantic regions after New York City. Sinc ...

Pennsylvania Pennsylvania (; (Pennsylvania Dutch: )), officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. It borders Delaware to its southeast, Ma ...

. The

of Chicago Options Associates in 1994 was Michael Davis, and the company had established a successful reputation in Chicago. Davis hired

Indiana University Indiana University (IU) is a system of public universities in the U.S. state of Indiana. Campuses Indiana University has two core campuses, five regional campuses, and two regional centers under the administration of IUPUI. * Indiana Univers ...

economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analy ...

Ph.D. graduate student

to analyze the company's pricing-model strategy; Wales left his graduate program to join the company as research director, serving in that capacity from 1994 through 1998. He was adept at determining future movements of foreign currencies and

interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, t ...

s, and Davis mentored Wales in more-aggressive financial trading. Davis joined Wales and Tim Shell in 1996 to form the

Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a ''internetworking, network of networks'' that consists ...

company,

Bomis Bomis ( to rhyme with "promise") was a dot-com company best known for supporting the creations of free-content online-encyclopedia projects Nupedia and Wikipedia. It was co-founded in 1996 by Jimmy Wales, Tim Shell, and Michael Davis ...

. In 2003, when Wales decided to form a non-profit organization to manage the website

Wikipedia Wikipedia is a multilingual free online encyclopedia written and maintained by a community of volunteers, known as Wikipedians, through open collaboration and using a wiki-based editing system. Wikipedia is the largest and most-read ref ...

, Davis, Shell and Wales formed the initial three-member

Wikimedia Foundation The Wikimedia Foundation, Inc., or Wikimedia for short and abbreviated as WMF, is an American 501(c)(3) nonprofit organization headquartered in San Francisco, California and registered as a charitable foundation under local laws. Best kno ...

Board of Trustees. In 2013, Chicago Options Associates was located on

LaSalle Street LaSalle Street is a major north-south street in Chicago named for Robert de La Salle, a 17th century French explorer of the Illinois Country. The portion that runs through the Chicago Loop is considered to be Chicago's financial district. ...

in Chicago.

''Dowling v Chicago Options Associates, Inc''

In 2007, the company was the subject of a decision in a lawsuit before the Illinois Supreme Court when a creditor argued that it was owed monies from the defendants after judgments were obtained against them. The court ruled against the creditor and in favor of the law firm, stating that the retainer owed to the firm took precedence. In ''Dowling v Chicago Options Associates, Inc'', the Illinois Supreme Court ruled that preemptive retainers used by attorneys were acceptable arrangements with clients. The original case was between plaintiff Brian Dowling and defendants Chicago Options Associates and Michael E. Davis, in which Dowling won a judgement of $817,830.45 from the defendants. After the court entered its judgement against him, Davis then tried to shield his assets from the plaintiff using his attorney-client relationship with the law firm of DLA Piper to assist him in buying a home in

. As part of this arrangement, Davis transferred funds into a trust account controlled by DLA Piper. At that time, as stated in the contract between DLA Piper and Davis, the law firm was allocated $100,000 of those funds as its retainer; the funds were used to pay day-to-day company expenses. When Dowling's attorneys learned about the retainer to DLA Piper they asked the court to order the return of the retainer to the plaintiff, and the circuit court ruled in favor of Dowling. On appeal, the decision was upheld. The Illinois Supreme Court reversed the circuit-court decision, ruling that the retainer was the property of DLA Piper and not Dowling. Both the

and Chicago Bar Association filed '' amicus curiae'' briefs in the case favoring the law firm's position. The case dealt with the concept of an

advance payment An advance payment, or simply an advance, is the part of a contractually due sum that is paid or received in advance for goods or services, while the balance included in the invoice will only follow the delivery. Advance payments are recorded as ...

retainer, a fee given to an attorney for later services to a client. An advance payment retainer became part of an attorney's assets as soon as it was paid, regardless of subsequent events. More common types of retainer defined by the court included the classic retainer (also known as a true retainer) and the security retainer. A classic retainer was described by the court as one used in an attorney-client relationship for a set length of time or a particular purpose. A security retainer referred to a deposit kept in a trust account by the attorney, distinct from their own assets. The case was the first recognition of advance payment retainers in Illinois. The case became a parameter for defining retainers in Illinois. The '' Illinois Bar Journal'' observed in 2009, "The starting point for any discussion of getting paid for work in the private practice of law is retainer fees. In Dowling v Chicago Options Associates, Inc ... the supreme court identified three types of lawyer retainer fees that are permissible in this state ..." and referred to the legal descriptions as "Dowling fee classifications". On July 1, 2009, the Illinois Supreme Court codified the definitions set forth in the case as a rule applicable to the practice of law in the state; known as Rule 1.15(c), it came into practice on January 1, 2010. The ''Illinois Bar Journal'' noted, "Paragraph (c) of the rule reflects the recent supreme court decision in Dowling v Chicago Options Associates, Inc (4) and describes in detail the so-called advance payment retainer recognized in Dowling."

References

External links

* Wikimedia Foundation Board of Trustees, at Wikipedia:Meta * Former Board of Trustees members, at

{{Portal bar, Business, Chicago, Companies, Economics, Illinois, United States Companies based in Chicago Business in Chicago Financial services companies of the United States History of Wikipedia Options (finance) Financial services companies established in 1987 1987 establishments in Illinois

History

Options and futures trading

''Dowling v Chicago Options Associates, Inc''

See also

References

Further reading

External links