Direct Access Partners has shut down.
The institutional brokerage stopped handling orders two days ago, sources tell Traders Magazine, after its clearing firm, Goldman Sachs, stopped clearing its trades.
Goldman ceased doing business with the firm shortly after the Securities and Exchange Commission charged four Direct Access employees two weeks ago with bribing Venezuelan officials for bond business, according to sources.
Without Goldman backstopping its trades, sources say, other firms would shy away from doing business with Direct Access to avoid counterparty risk.
Direct Access partners chief executive Ben Chinea and head of equity trading Mike Shea would not comment for this article.
Goldman officials could not be reached for comment.
New York-based Direct Access Partners started out in 2002 as a New York Stock Exchange floor brokerage and grew rapidly over the years in both equities and fixed income. Sources tell Traders the firm has 130 employees.
Most recently the firm hired a team of listed derivatives specialists from I.A. Englander. In 2009, Direct Access hired a team of equity traders from the institutional brokerage arm of defunct NYSE specialist Van Der Moolen Holding.
The trouble started on May 8 when the SEC charged four Direct Access employees with bribing a Venezuelan government official in order to win bond trading business with a Venezuelan state bank.
