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| | From:  sportstarr10 (Original Message) | Sent: 12/5/2008 2:31 PM |
Not like they didn't already exist ... BUT !!! Not LOLOL !!!   ICAP Hires JPMorgan’s Daemon Bear to Head ‘Dark Pool�?(Update1) By Nandini Sukumar Dec. 5 (Bloomberg) -- ICAP Plc, the world’s largest broker of trades between banks, named Daemon Bear to set up and lead an alternative trading system and so-called dark pool for stocks. Bear, previously head of equity trading at JPMorgan Chase & Co.’s asset management unit, will join the company in early January 2009 as head of Blockcrossing. ICAP confirmed Bear’s appointment and plans for the new electronic platform in an e- mail today. The system for banks and fund managers will be created specifically to handle large blocks of shares and act as a dark pool that won’t display prices. The company wants to develop a multilateral trading facility by the second half of 2009, said a person familiar with the plans yesterday who declined to be identified because the plans weren’t public at the time. London-based ICAP, which in 2006 ended merger talks with London Stock Exchange Group Plc, joins other so-called MTFs including Chi-X Europe Ltd., Turquoise, Nasdaq OMX Group Inc. and Bats Trading Inc., all of which aim to take market share from the traditional European stock exchanges. ICAP will focus on offering a dark pool. Institutional investors are increasingly turning to dark pools, which compete with bourses including the New York Stock Exchange, LSE and Nasdaq OMX and allow investors to disguise their strategies. The systems match orders anonymously and don’t publicly disseminate quotes. In Europe, they are proliferating along with alternative exchanges as new rules spur competition and demand best execution for customers. Previous Jobs Bear was head of equity trading for 10 years at JPMorgan Asset Management and had previously worked at Invesco Ltd. and New Star Asset Management Plc, according to ICAP. “Daemon is well known to the connectivity and trading technology community as well as considered an expert in buyside trading requirements,�?Peter O’Toole, managing director at ICAP Securities, said in the statement today. Bourses are trying to fight off the new rivals by cutting fees and introducing dark pools themselves. Deutsche Boerse AG started one called Xetra MidPoint on Nov. 24. LSE is setting up a dark pool known as Baikal, after the deepest lake in the world, which has its own chief executive officer and will be run separately from the bourse. Record Profit ICAP, led by Chief Executive Officer Michael Spencer, said Nov. 18 that profit jumped to a record as price swings triggered by the credit crisis boosted commissions on trading currencies and securities. Net income gained 5 percent to 84 million pounds ($123 million) for the six months ended Sept. 30. While the collapse of the U.S. subprime-mortgage market has spurred almost $1 trillion of writedowns and losses at the world’s biggest banks, ICAP’s income increased as customers stepped up trading. Morgan Stanley said last month that so-called interdealer brokers face slowing growth as banks shrink their balance sheets and reduce transactions. The company, whose shares are down more than 60 percent this year amid the worst financial crisis since the Great Depression, said it expects pretax profit for the year ending March 31, 2009, to be ahead of the average of 13 analysts�?current estimates of 347 million pounds. ICAP benefits when price fluctuations increase because more customers use the products it offers. The company competes with brokers including GFI Group Inc. and BGC Partners in New York and Tullett Prebon Plc in London. To contact the reporter on this story: Nandini Sukumar in London at [email protected] Last Updated: December 5, 2008 08:39 EST |
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Ponzi Scheme @ CITI... A new Citigroup scandal is engulfing Robert Rubin and his former disciple Chuck Prince for their roles in an alleged Ponzi-style scheme that's now choking world banking. Director Rubin and ousted CEO Prince - and their lieutenants over the past five years - are named in a federal lawsuit for an alleged complex cover-up of toxic securities that spread across the globe, wiping out trillions of dollars in their destructive paths. Investor-plaintiffs in the suit accuse Citi management of overseeing the repackaging of unmarketable collateralized debt obligations (CDOs) that no one wanted - and then reselling them to Citi and hiding the poisonous exposure off the books in shell entities. The lawsuit said that when the bottom fell out of the shaky assets in the past year, Citi's stock collapsed, wiping out more than $122 billion of shareholder value. However, Rubin and other top insiders were able to keep Citi shares afloat until they could cash out more than $150 million for themselves in "suspicious" stock sales "calculated to maximize the personal benefits from undisclosed inside information," the lawsuit said. The latest troubles for Rubin, Prince and others emerged in a 500-page investigation by Citigroup investors represented by law firm Kirby McInerney. The probe was used to amend and add new details to a blanket investor lawsuit filed against Citigroup a year ago. The amended suit called the actions of Citi leaders "a quasi-Ponzi scheme" to hide troubles - and keep Citi stock afloat while insiders unloaded about 3 million shares between Jan. 1, 2004 and Feb. 22, 2008 for huge profits. In addition to Citigroup, Rubin and Prince, the complaint names Vice Chairman Lewis Kaden, ex-CFO Sallie Krawcheck and her successor CFO Gary Crittenden. Rubin cleared $30.6 million on his stock sales, while Prince got $26.5 million, former COO Robert Druskin got nearly $32 million and former Global Wealth Management unit chief Todd Thomson got $25.7 million, the suit said. Citi denied the allegations and said it "will defend against it vigorously." |
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Old Article ...
The secret stock market
'Dark pools' and other new-age exchanges rewrite the rules, under the radar
By David Weidner, MarketWatch
Last Update: 5:23 PM ET May 11, 2007
<LABEL class=StoryContent id=StoryContent_Content>
NEW YORK (MarketWatch) -- Fourteen floors above Seventh Avenue, in an office more than a mile from the trading floor of the New York Stock Exchange, a trumpet sounds reveille over a loudspeaker.
Liquidnet Holdings Inc., an alternative trading system used by institutions, has just executed a block trade of a million shares or more.
Unlike the bulk of trading in stocks, this trade was made anonymously and was executed outside of the market where retail investors and institutions meet. And unlike a trade on the floor of the New York Stock Exchange, no one will ever know who put a million shares up for sale and who just bought them.
Liquidnet is one of dozens of new private trading networks that -- in just two years' time -- have ushered in a sea change that challenges Wall Street's top institutions while posing vexing questions for regulators and investors alike.
Driven by the boom in electronic trading and other technological advances, a range of upstart entrepreneurs now are doing the kind of bulk trading that up until a few years ago was practiced exclusively in upstairs trading rooms at big brokerages like Morgan Stanley and Lehman Brothers.
"We're in the middle of a revolution," said Tim Mahoney, chief executive of BIDS, a trading system launched by a consortium of top-tier Wall Street firms.
These so-called alternative trading systems are propagating rapidly, are often labeled "dark pools" because of their nebulous and murky nature. Estimated to handle about 1 out 10 shares traded each day in the U.S., dark pools are meeting a need by institutions to grab or dump stocks quietly -- and anonymously. Like Liquidnet, many of them sport imaginative brand names in a nod to science fiction, such as Sigma X, VortEx and Block Alert.
In the harsh light of a public marketplace like the floor of the NYSE, an institution trying to pull off a massive trade runs the risk of making a big splash that will move the market. But in a dark pool, a big fish can jump in without so much as a ripple.
Shades of murkiness
Players in alternative exchanges
DARK POOLS
Liquidity Ping, VortEx, PositNow, Continuous Cross Buyers and sellers are matched anonymously
CALL MARKETS
Opening Cross,
Posit Match Trades executed at market prices but done anonymously
NEGOTIATION POOLS
Liquidnet, BIDS Buyer contacts and bargains with seller
In a matter of months more than three dozen dark pools have taken shape, creating a new and wild frontier that is largely unregulated. And the industry is growing so fast regulators can't keep up. Moreover, some observers fear these private marketplaces could take too much trading volume from the public markets -- putting retail investors at a disadvantage.
What's certain is dark pools have radically altered the way big institutions trade. And because private trading networks are extremely profitable, an array of old-line Wall Street firms is following in the footsteps of independent startups that have carved out the industry's hottest new niche.
"Execution-only technology has become a big business," said Jim Ross, vice president of MatchPoint, the dark pool that the NYSE is poised to launch next month
Purveyors of dark pools, also known as alternative trading systems, have taken a small investment in technology, as little as $20 million, and produced a business, that in the case of that Liquidnet trade, will produce $20,000 in fees, or 2 cents a share.
In return, investors who are looking to shed or buy huge blocks of stocks obtain anonymity and avoid moving the price of the stock by showing their hand.
As Dan Shaffer, owner of Shaffer Asset Management, put it at a dark pools conference recently, "Anytime you put an order in the system, the smart people know about it and talk about it."
Without the easy access granted by dark pools, big institutions would have to move big orders through the market by calling a broker who would, in turn, send that market to the floor. As the information leaked -- first to the broker, then to the floor -- an investor's intentions were exposed.
But in a dark pool, a big institutional investor like Fidelity Investments or New York Life can shop or put a buy order out for stock without alerting a regular broker. Though alternative trading systems aren't water-tight, they do minimize information leakage, traders say.
"There's leakage everywhere," said Robert Gauvin, director of equity trading at Pioneer Investments. "It's just a matter of how much."
But with every revolution comes struggles. These markets are largely unregulated and because of the anonymity are open to abuse. They are, at times, inefficient. Critics say they run counter to the spirit of new market regulations by the Securities and Exchange Commission that require that investors get the best price available for their order.
Who's in?
Such concerns have failed to hamper the growth of dark pools. A decade ago there were no platforms outside of traditional broker-dealers where trades could be executed. Now, there are 500 million shares a day trading in dark pools and that number is expected to swell to 1.35 billion by 2010, according to the Tabb Group, a market-research firm based in Westborough, Mass.
A combination of technology and profit potential are driving a boom of startups. The Tabb Group estimated there were 38 dark pools up and running as of May 1. Among them are three major categories of services that represent varying shades of anonymity.
* Some are true dark pools, where buyers and sellers are matched anonymously. Players in this segment include Liquidity Ping, VortEx, PositNow, Continuous Cross and Pin.
* Call markets such as Opening Cross and Posit Match execute trades at a price -- usually set by the public market -- anonymously.
* Negotiation-based pools, run by the likes of BIDS and Liquidnet, which match up buyers and sellers who then bargain on a deal price.
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http://www.marketwatch.com/news/story/story.aspx?guid=%7B11EB6EC9-6D71-43C9-ADD2-59C6B9E3C5D1%7D&print=true&dist=printBottom
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