Robert L. Citron is still confounding prosecutors and the public.

Making his first public appearance in a year and a half, the disgraced former treasurer of Orange County testified at the trial of the county's former budget director Ronald S. Rubino. Rubino faces felony charges for allegedly aiding and abetting Citron's scheme to divert $100 million in non-county funds belonging to schools and special districts. Although Citron was billed as the DA's star witness, he dealt a surprise blow to the prosecution when he flatly denied he'd ever told the budget director of the scheme.

Citron elaborated on his previous bizarre allegations that not he but his assistant, Matthew Raabe, in collusion with Merrill Lynch, was the mastermind of the whole derivatives debacle. Raabe, who is scheduled to go on trial next month, has previously accused Rubino of being an architect of the illegal diversion scheme.

In two hours of testimony Citron continued to demonstrate a characteristically feeble grasp of derivatives. At one point the former treasurer explained how it was possible to earn up to four million a year with an investment of only $750,000 in a security he dubbed "a reverse against itself." Merrill Lynch, he claimed, told him these securities were perfectly safe.

Brooksley Born's move to be chairperson of the Commodity Futures Trading Commission has had all the qualities of a "Perils of Pauline" movie. First came the suspense, when the Clinton administration, stung in previous nomination brawls, dithered for months about who to pick after predecessor Mary Shapiro announced her resignation last January. To guarantee Born's confirmation, the administration made a deal to put forward long-time Bob Dole advisor David Spears for another vacant CFTC seat.

After that, nothing ran smoothly, as Born, a partner with the high-powered, mostly Democratic law firm of Arnold & Palmer, became a target of Republican senatorial ire because of an alleged friendship with first lady Hillary Clinton. Senator Lauch Faircloth (R-NC) used the personal privilege rule to delay a confirmation vote, ostensibly because Born as commissioner might be in a conflict-of-interest situation should the CFTC probe into the first lady's cattle futures trading of 15 years ago. Born refused to recuse herself in this unlikely event, explaining that hers was a professional friendship with Hillary Clinton, based on contacts at the American Bar Association.

After holding out for a month, Faircloth made a deal to let Born come forward providing the Democrats lifted their hold on Alan Greenspan's confirmation as Federal Reserve Board chairman. But still the Washington circus wasn't through with Born. More delays ensued when Democrats blocked Spears' confirmation to put pressure on Republicans to go along with several of Clinton's judicial appointments. Born looked mighty relieved by late August when the obstacle race was over and she was sworn in.

James McNabb has spent his career as a derivatives dealer making trips back and forth across what financial jet setters call "the pond" between London and New York. Now the native Australian has left the sell-side to join Capital Market Risk Advisors, the consulting firm known for its forensic analysis of derivatives deals gone bust. "It's a great way to see the risk management side of the derivatives business," McNabb says. "CMRA has both practical and line experience. They know how all aspects of risk management work together, and can work with a range of clients-all of which calls for specific expertise that a Big Six accounting firm can't offer."

After beginning his career with IJB Schroder in New York, he worked at Swiss Bank in London, where he helped develop whiz-bang fixed-income products like knock-out caps, quantos, spread options and periodic switchables. "I had fun trading in London because there were so many curves and currencies," he recalls. Later he moved to the bank's Australia office, where he developed risk management software to monitor options trades.

McNabb says he's happy to be back in New York, where he received his MBA from Columbia University. "It's cleaner and neater now that I'm 35," he claims. "When I was 25 the City was noisy, gritty and dangerous. But I love it; it suits me." He also claims he no longer craves that Australian mainstay, Vegemite sandwiches. Not so his wife. She's a hard case, perhaps because she is expecting the couple's first child in November and plans to give birth (God willing) at the same time and in the same hospital as Madonna.

Charles Minaar is no stranger to agriculture. And as the son of a South African sheep farmer, it seems perfectly appropriate that he joined the New York Cotton Exchange (NYCE) as senior vice president of marketing and product development.

But don't cast him as a hick. He spent 19 years at Chase Manhattan Bank, where he launched the bank's operations as a commodity trading advisor and pool operator, a business that grew eventually to have $500 million in assets.

One of Minaar's first product launches will be a new potato futures contract, which he hopes will lead to other contracts aimed at growers and suppliers of other agriculturals. In another bid to draw new business to NYCE and its affiliate, Finex, Minaar expects to be marketing options on U.S. dollar­based currency futures. "We're positioning Finex so it complements institutional over-the-counter markets-rather than the small speculator-by focusing on credit issues," he says. "We will be explaining to banks that they don't have to bother developing margining systems that create net amounts; we'll do that for them." He believes that margining systems are not found on larger exchanges because they have to cater to large member populations that have obstructed the idea.

Most risk management software companies are owned and run by the founding teams. But the year-old Inventure is an interloper. This British venture management company has bought two software companies where the original founders' energies flagged. In March of 1995 Inventure acquired Astrogamma, founded by ex-trader Peter Cyrus and provider of the FX options industry's standard pricing/trading package, FENICS. In March of this year the partners snapped up Ranger, the brainchild of legendary trader Paul Tudor Jones. (See Derivatives Strategy, April 1996). Says Mark Simon, Inventure's CEO, "Both traders seemed to have run out of patience with the software business just as we ran in."

Though the two acquired outfits are very different, they fit Inventure's core belief that smart systems are on the verge of a huge leap forward and will soon begin to revolutionize the trading business. "There are two basic principles we're following," says Simon. "One, you can make money by using technology in the exchange of risk and two, there is a need for technology that improves the trading environment." FENICS fulfills the first principle, and Ranger the second. "The timing for this is right," argues Simon.

FENICS is the industry standard option valuation software. It has about an 80 percent market share. Everyone in the interbank trade has a FENICS. Ranger is an analytical operating system that melds a variety of historical and current data feeds and runs them through a smorgasbord of enhanced analytical tools that can answer almost any "what if" query. Some of these tools come built in, others can be developed through this object-oriented software's tool kit. For Simon both products have the kind of apps that are hot, because they are manifestations of real live brains of flesh-and-blood traders. "What we see in application development these days is an attempt, increasingly, to capture the expertise in the market," says Simon.

Inventure has two partners in addition to Simon, who is an ex-IBM executive (and the youngest, at 29, to be named branch manager for IBM Europe). The others, Michael Adam and Brendan Foley, have previous experience with technology venture investing. "There's no limit to what large institutions will spend on technology in order to remain competitive," says Simon. As a result, he says, the trading business is on the verge of a new era. "We wanted to be in a position where we could-through our management talents and technology, either acquired or developed-participate in this revolution."

FENICS, which already allows interaction with Excel files, will continue to expand its interoperability. In addition, Simon hopes to strike alliances with others for the development of similar standard-setting FENICS software for equity options and other derivatives. Plans for Ranger are far reaching. "Ranger is a manifestation of an analytical operating environment the like of which does not exist commercially," says Simon. "The underlying technical architecture supports the writing of object-oriented-like code to drive an analytical engine of enormous power."

Simon dreams of a day when hundreds of traders will turn on their NT workstations to see a Ranger operating system pop up, loaded with real-time and historical data feeds, off-the-shelf applications and internally developed analytical tools which encapsulate traders' experience and expertise. Ranger can act as both a data warehouse and a depository of analytics. "It will become the engine of choice for manipulating series of data," predicts Simon.