ConvergEx Closes Bermuda Operation; Unit's CEO Leaves Firm
Traders Magazine Online News, March 12, 2012
ConvergEx Group has shuttered its Bermuda based program trading operation, the subject of an investigation by the Securities and Exchange Commission and the U.S. Department of Justice. Meanwhile, Anthony Blumberg, chief executive officer of the division, known as ConvergEx Global Markets, has left the firm.
A spokesperson for ConvergEx says the program trading operation was shut down at the end of last year. Its activities are now being handled from ConvergEx's London office.
CGM, which was a subsidiary of ConvergEx's G-Trade Services unit, primarily handled the firm's non-electronic program trading, and was a relatively small part of ConvergEx's overall business, according to the spokesperson. G-Trade, based in the U.S., handles the firm's electronic program trades worldwide.
Convergex would not say when Blumberg joined the agency brokerage and technology vendor, but press releases dated from 2007 indicate he was chief executive of G-Port, the predecessor to CGM. Blumberg was one of a handful of executive managing directors at the firm.
ConvergEx acquired G-Port when it bought G-Trade in 2002. G-Port was the cross-border basket trading division of CLSA, a Hong Kong brokerage. It created G-Trade in 1999. ConvergEx bought G-Trade initially to support Bloomberg TradeBook's international operations. Bill Capuzzi and Craig Lax manage G-Trade, as president and chief executive, respectively.
The move by Convergex to close CGM comes in the wake of an investigation by the feds into the trading practices of the group. In December, ConvergEx announced it was terminating a merger with CVC Capital Partners, partly because of the parallel investigation.
Sources tell Traders Magazine the practices in question revolve around the inappropriate handling of transitions by the group. The business of transition management involves selling one portfolio and buying another for a single money manager. Trades can be done on an agency or principal basis, but the method must be disclosed to the customer.
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