Livevol, Inc. cut staff from its broker-dealer unit last month as part of a plan to return to its roots as a technology concern.
The cutbacks reflect a concern by its management that the San Francisco-based provider of options data, analytics and trading software had waded too deeply into the brokerage business. They come four months after the company’s board hired veteran options industry executive Paul Finnegan as chief executive.
“We are refocusing our sales force and top management on our technology offerings,’ said Catherine Clay, managing director of enterprise and exchange services. “Last year, we started to get into some areas of the brokerage business that weren’t necessarily our strength.”
The company cut employees in each of its San Francisco, Chicago and New York offices, mostly in sales and marketing. In Chicago, it let go Dax Rodriguez, president of Livevol Securities; Gabe Duran, responsible for compliance; and Loren Reinhardt, director of institutional sales for the broker-dealer.
In New York, it cut three sales executives—Frank Kost, Kevin Malloy and Inga Turner. All three were registered with Livevol Securities, but were independent contractors. Thus, they were not employees, but were paid through commissions only. Kost and Malloy had only worked for Livevol from July.
The firm now has a total of 42 employees working out of its three offices. The firm’s two co-founders started the company in San Francisco, and most of the staff work out of that office and in Chicago. Finnegan, a senior NYSE Euronext options executive before joining Livevol in September, works out of the Chicago office. Control over the broker-dealer remains with the firm’s principals in San Francisco, according to Clay.
Like many software vendors, Livevol acquired a broker-dealer license in order to give its customers the ability to pay for the firm’s services with commissions on a pay-as-you-go basis. That can be less costly than acquiring a software license. The firm intends to continue to allow customers to pay through the broker-dealer, Clay said.
Livevol was founded in 2009. It acquired its broker-dealer license in 2010. Last year, it expanded its brokerage operations by entering into commission-sharing arrangements with three institutional brokers—Merriman Capital, Direct Access Partners, and Forefront Capital Markets.
Under the terms of the Merriman deal, announced in May, Livevol’s institutional customers could pay for Livevol’s data and analytics by trading through Merriman’s derivatives desk. Merriman and Livevol Securities split the commissions. In September, the head of Merriman’s derivatives desk, Joe Minton, subsequently left Merriman to join Livevol as a managing director of institutional trading.
