Oscar Gruss to Sell Brokerage to Employees Amid Trading Slowdown
Traders Magazine Online News, January 4, 2013
Oscar Gruss & Son Inc., the New York brokerage that traces its origins to Poland almost a century ago, will sell itself for a “nominal” price to two employees as trading slows, Chief Executive Officer Michael Shaoul said.
Shaoul, 46, will step down as head of the business, which employs about 30, if regulators approve the sale, he said during an interview. He’ll continue to run Marketfield Asset Management LLC, a New York-based money manager with about $4.5 billion in assets. Shaoul declined to specify the price being paid by Ronen Cohen and Avi Avital, who work in Tel Aviv.
The deal enables Oscar Gruss to continue trading stocks in the U.S. and Israel after Shaoul said in October that it had to close its merger-arbitrage unit as business waned. Other small brokerages including ThinkEquity LLC, Rodman & Renshaw LLC and WJB Capital Group Inc. shut their doors last year.
“We have managed to survive and hopefully the firm has a few decades more ahead of it,” Shaoul said. “When I look at how bad things got in the summer for small firms, that looks like a bottom for me.”
Oscar Gruss reversed its plan to shut the merger-arbitrage desk as the deal progressed, Shaoul said. The firm hired Barry Kaplan from Rochdale Securities LLC in November after that brokerage’s capital was depleted by an unauthorized $1 billion trade in Apple Inc. stock.
Middlemen who help match buyers and sellers on Wall Street are finding it harder to earn commissions as money managers trade fewer securities, execute more transactions electronically and cut the amount of research they purchase. Shaoul said he wasn’t able to find another brokerage to buy the business.
“We couldn’t get anybody to look at it because nobody wanted to add headcount, even headcount with demonstrable commissions sitting behind it,” he said.
Oscar Gruss, who founded a currency-trading firm in Lvov, Poland in 1918, fled to the U.S. during World War II and opened a brokerage in New York with his son Emanuel, according to the company’s website.
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