Pipeline Trading Ceases Operations; Top Executive Steps Down
Traders Magazine Online News, May 10, 2012
Troubled brokerage Pipeline Trading, which recently rebranded itself as Aritas Group, is selling its key technology assets and has stopped accepting orders, sources close to the company tell Traders Magazine.
As a result, Aritas Group's executive chairman, Jay Biancamano, will be joining software vendor Portware. This coincides with Portware's announcement yesterday that it has agreed to buy key Aritas technology assets.
Biancamano will serve in Portware's business and product development group. He is expected to join the firm, along with 20 other Aritas staff, by the end of the second quarter.
Last year, Biancamano replaced Alfred Berkeley as executive chairman at Pipeline after the two heads of the firm--Berkeley and Pipeline founder Fred Federspiel--left in the wake of a trading scandal.
Berkeley was fined $100,000 for his involvement in last year's scandal when it was revealed that Pipeline had sent order flow to an affiliate without proper disclosure to clients. Federspiel was also fined $100,000. Under a settlement agreement with the Securities and Exchange Commission, neither man admitted nor denied wrongdoing.
Pipeline itself received a black eye last October when the SEC hit the electronic broker with a $1 million fine for the shenanigans. Pipeline--and now Aritas--got hit with a crisis of confidence. As part of its recovery plan, in November of 2011, Pipeline named Biancamano, the former global head of marketplace and corporate strategy at Liquidnet, as its new executive chairman. In January the company officially changed its name to Aritas.
"We worked together at Liquidnet and I look forward to working with Jay again," Eskandar told Traders Magazine in an interview.
The hire of Biancamano comes as Portware has agreed to purchase certain key technology and analytical assets of Aritas. The purchase includes Alpha Pro, which makes short-term trading forecasts, and the Algorithm Switching Engine, which allows customers to use a wide variety of industry algorithms.
Eskandar declined to provide further details of the transaction.
However, Eskandar told Traders Magazine his firm has not purchased any of the broker-dealer operations, desk, dark pool Block Market or broker-dealer license from Aritas Group.
"As always, we want Portware to stay broker-neutral," he said.
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