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Joyce’s Arxis Capital Shutting Down, Sources Report

Traders Magazine Online News, May 22, 2017

John D'Antona Jr.

Has the ax fallen on Arxis?

According to several market sources, yes, it has. 

Electronic market making firm Arxis Capital, founded in 2014 by a team of experienced trading, risk management, quantitative research and technology executives from Bank of America Merrill Lynch’s Global Market Making business, together with seasoned market professionals from several other banks and trading firms.

Tom Joyce

The firm’s executive chairman and CEO Tom Joyce, was the former CEO of Knight, where he worked for over 11 years before leaving the firm after a computer malfunction caused the company to lose more than $450 million on a single day through erroneous trades.  Knight’s computers flooded markets with unintended trades on Aug. 1, 2012, sending dozens of stocks into fits and starts. The fault caused shares to swing as much as 151 percent and left the firm with $450 million trading loss that would have sent it into bankruptcy hadn’t a group of Wall Street firms bought a commensurate amount of convertible securities a week later.

Eventually, Joyce was able to save his firm and stave off bankruptcy and get a deal done with Getco for $1.4 billion.

Joyce took many former KCG professionals with him to the new firm.

According to one source who spoke on conditiion of anonynimity, the firm was looking to partner up with another firm in a merger failed and Crestview Partners, Arxis' backer, pulled its funding while there was any left.  

Market making has become an increasingly compettitive and less profitable business as technology costs, including connection fees to dozens of exchanges, and a prolonged dearth of substantial equity trading volume has hurt the business.

As of Monday morning, sources reported the firm was clearing out it books as it prepares to shutter operations.

An email seeking comment to the firm was unreturned.  

According to the firm’s website, the firm’s name was derived from the Latin word Arx, meaning ‘stronghold.’ “Like the Arx fortress that defended ancient Rome from the Capitoline Hill, Joyce and the company’s founders viewed Arxis Capital as a defensive structure for capital and clients interfacing with complex markets. Maintaining the highest level of risk management, compliance, capital preservation and client protection is at the heart of what we do.”

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