(Bloomberg) — Bank of America Corp. traders who left as the lender dismantled their electronic market-making unit are attempting to recreate the business as an independent firm with former Knight Capital Group Inc. chief Tom Joyce.
Gene Reilly, who departed as Bank of Americas head of global market-making this year after the project was shuttered, is seeking about $150 million in funding for his New York-based startup, Arxis Capital, people with knowledge of the plan said, noting the amount could change. Joyce became executive chairman of the new company in August, according to his LinkedIn profile.
The business of executing stock trades for retail brokerages is dominated by firms including Citadel LLC, KCG Holdings Inc. and UBS AG. A new entrant could take advantage of banks waning appetite for the specialty amid tougher rules governing trading and heightened scrutiny of equity markets. Bank of America closed its market maker this year because of those concerns, people with knowledge of the move said in May.
Arxis is a Latin word that can be translated as citadel or fortress. Reilly, its chief executive officer, recruited more than half a dozen Bank of America employees who were told to find new jobs as their unit closed. The bank created its business last year to execute equity orders for the Merrill Lynch wealth-management division, which had $2 trillion in client balances as of Sept. 30.
Knights Sale
Jonathan Wang, former head of trading for the Bank of America market maker, will run trading at Arxis, the people said. Marlon Abayan, a former quantitative trader at the lender, is head of equity research for the new firm.
Other Bank of America employees joining Arxis include technology vice president Radu Galis, trading associate Shengen Zhai and salesman Leucio Iacobelli, as well as several junior workers, according to the people.
Spokesmen for Arxis and Charlotte, North Carolina-based Bank of America declined to comment. Employees either declined to comment or didnt reply to messages sent via LinkedIn, where some already list Arxis as their new employer.
Joyce, 59, ran KCG predecessor Knight Capital Group for 11 years until July 2013, building it into one of the biggest U.S. market-making firms. As chairman and CEO, he presided over the company in August 2012 when a computer malfunction caused erroneous trades and led to more than $450 million in losses. He kept the firm out of insolvency by arranging a cash bailout and later that year sold Knight to Getco LLC in a deal valued at about $1.4 billion.
Joyce, known as TJ, graduated from Harvard College in 1977 with a degree in economics. At Harvard, he was captain of the baseball team and a linebacker in football, earning him induction into the colleges athletic hall of fame.
In the wake of Knights trading loss, Joyce was among top executives who initially sought to keep the firm independent.
