so where is Peter Beck and the ex-swifters?

Discussion in 'Prop Firms' started by peregrinecap, Jul 16, 2012.

  1. Geez, long artilce - this may be of interest:




    Mr. Beck, a Hungarian-born 57-year-old with long salt-and-pepper hair and a penchant for colorful scarves, said overzealous regulators hurt his business with reckless allegations. He gave up control of the trading operation last year and closed the brokerage firm that is the subject of the Finra settlement. "I want to be out of this business, I've had it," Mr. Beck said.

    The army of traders, their numbers somewhat diminished, now operate under a company called Calm Oceans LP, which is set up as a hedge fund in the Caribbean island of Anguilla with headquarters in San Jose, Costa Rica.

    Its general partner is Mr. Beck's family trust, called Calm Seas Inc. Mr. Beck also controls a Toronto company called Orbixa Technologies Inc. that owns and leases the technology used by the network's traders.



    Don
     
    #11     Jul 31, 2012
  2. i think Mr.Beck is very creative and Swift was a truly successful /legitimate business venture. why is it that the Finra/FSA screwed it ?
     
    #12     Aug 1, 2012
  3. zdreg

    zdreg

    Regulations in the U.S. and U.K. prohibit traders from placing orders they don't intend to complete. Mr. Beck, in appealing the FSA fine, said regulators could have no way of knowing that his traders didn't intend to complete the layering orders they placed. Speaking to the Journal, Mr. Beck acknowledged that Swift traders engaged in this activity but he said the orders could, in fact, have been filled, and that made them legitimate.

    The imminent Finra settlement says Mr. Beck maintained that order layering wasn't prohibited in American markets, but "Beck could offer no authority for his conclusion," it says.

    Mr. Beck and a now-defunct brokerage firm he owned are expected to consent to Finra's findings without either admitting or denying them, according to a copy of the settlement. Mr. Beck is expected to be barred from associating with any Finra member.

    Besides Finra, the Ontario Securities Commission recently sanctioned Mr. Beck and Swift for not adequately supervising trading to prevent deceptive activities. The U.S. Securities and Exchange Commission is looking into the trading network's activities, according to a person familiar with the matter. The SEC declined to comment.

    Mr. Beck, a Hungarian-born 57-year-old with long salt-and-pepper hair and a penchant for colorful scarves, said overzealous regulators hurt his business with reckless allegations. He gave up control of the trading operation last year and closed the brokerage firm that is the subject of the Finra settlement. "I want to be out of this business, I've had it," Mr. Beck said.

    The army of traders, their numbers somewhat diminished, now operate under a company called Calm Oceans LP, which is set up as a hedge fund in the Caribbean island of Anguilla with headquarters in San Jose, Costa Rica.

    Its general partner is Mr. Beck's family trust, called Calm Seas Inc. Mr. Beck also controls a Toronto company called Orbixa Technologies Inc. that owns and leases the technology used by the network's traders.

    These continuing links to the network aren't expected to be affected by the provision of the Finra settlement that would bar Mr. Beck from associating with any Finra member.

    Mr. Beck arrived in Canada from Hungary as a youth in 1979, working as a short-order cook and a real-estate agent before founding a long-distance telephone company, ITN Corp. He sold it for several million dollars in 1993 and relocated to Paris, but found himself bored and returned to Toronto to launch more businesses, among them one selling Internet pornography. Then one day on an airline flight, he read an article about Internet day trading and decided to build a network for such traders, Mr. Beck said in the interview.

    In 1998, he and several partners launched Swift in a small office in Toronto. Through computer hookups, it could provide traders with the ability to directly access a cluster of the electronic stock-trading networks that were then popping up.

    At first, traders wagered their own money, paying a per-order fee, but Mr. Beck then reorganized the operation. Under the new setup, clients opened remote trading operations in cities such as Rotterdam and Barcelona and provided their own cash to traders. Swift acted as a trading conduit and provided extra cash, or leverage, so they could amplify their bets.

    Traders, paid a salary and a slice of their winning trades, would buy stocks and sell them minutes or seconds later in an attempt to capitalize on fleeting moves.

    It was a Darwinian system. If traders lost a set percentage of the funds they juggled, their terminal would freeze for the day, Mr. Beck said. And traders who consistently lost were quickly dropped.

    Winners, however, could take home tens of thousands of dollars a day. Among the winners, a few spent wildly. "Guys literally blew hundreds of thousands at strip clubs," says a former Swift trader.

    Around 2004, a Chinese-Canadian Swift manager opened a branch in Guangzhou, China. "We found that for $2,500 a month we could get a good-quality computer network in China," Mr. Beck said. Soon, Swift had dozens of trading rooms in China. Managers tried to keep their locations secret to prevent poaching of traders, mostly young men willing to stay up late at night to trade on U.S. and European markets.

    Their trades traveled by fiber-optic links to Swift's Toronto hub, then to dozens of electronic stock-trading venues. Acting as broker for the trades was a firm in Boston called Biremis Corp., which, like Swift, was owned by a Beck-controlled holding company, BRMS Holdings Inc.

    Stock exchanges liked the volumes the army of Swift day traders produced. Officials from the major U.S. exchanges flew to Toronto to visit Mr. Beck to discuss whether their operations were suiting Swift's needs, according to Mr. Beck and former exchange officials.

    "I knew them as a significant player in the space," says Steve Bonanno, who visited Swift in 2010 when he was chief technology officer of Direct Edge, an electronic exchange in Jersey City, N.J.

    There were scrapes with regulators. As far back as 2002, Swift was penalized for "wash sales," in which one Swift trader sold a stock to another Swift trader. Though wash sales have no economic value, for which reason they are prohibited in the U.S., such trades can earn money for a trading firm because exchanges offer fees to firms simply for posting orders that result in trades. Finra's forerunner, the National Association of Securities Dealers, penalized the firm's U.S. counterpart and Mr. Beck $101,000 in fines and disgorged profits. As is typical with such cases, Mr. Beck and Swift didn't admit to or deny the charges.

    Mr. Beck says his firm posted a profit every day for about 10 straight years except once when there was a computer glitch. He calls this success a hallmark of a robust risk-management strategy that cuts off traders when they start losing money. Regulatory agencies, however, tend to see never-lose trading a different way, as a red flag.

    Regulators and stock-exchange market-surveillance officials in the U.S. started noticing what they considered suspicious trading activity that traced to Biremis, the in-house brokerage firm, according to people familiar with the matter. Regulators including Finra and the FSA worked together across borders in looking into Mr. Beck's firm.

    First, in May 2011, came the FSA's $13 million fine for layering, the decision being fought in U.K. courts. Two months later, Finra in the U.S. sent Biremis a Wells notice, or notification it might face civil charges.

    Last month, Mr. Beck and several firms he was affiliated with including Swift agreed to pay $100,000, plus $300,000 in costs, to settle an action brought by the Ontario Securities Commission. They admitted failing to show they adequately reviewed trading "for possible instances of manipulative or deceptive trading activities."

    The Finra settlement about to be announced says the regulator detected "multiple instances of potential patterns of layering activity" by Swift traders starting five years ago, but the firm, despite prodding by the agency, did little about them for years.

    After Swift was dissolved at the end of 2010 and Calm Oceans took control of the network, Calm Oceans traded for a short period through a broker in Austin, Texas, called Transcend Capital. Calm Oceans orders from Transcend triggered a number of alerts at Finra flagging potentially manipulative activity, according to a person familiar with the regulator. Finra sent a team of examiners to look into the matter, this person says, adding that Transcend severed its ties to Calm Oceans. "We were working together with Finra," says Transcend's CEO, Vernon Jones.

    The Finra settlement says, among other things, that Mr. Beck's now-dissolved brokerage house, Biremis, failed to properly monitor trading of stocks on a variety of trading venues to prevent layering.

    Mr. Beck says that in the network now, strict controls have been put in place to discourage any manipulative trading activity. For instance, traders have been told not to buy and sell infrequently traded stocks, which are more vulnerable to manipulation.

    The network of traders is diminished from its glory days, Mr. Beck says, owing both to lower volumes on stock markets around the world and to competition from computerized "high-frequency" trading firms.

    At the garret office in Cluj-Napoca, Romania, on a recent day, a 28-year-old trader's screen came alive at 4:30 p.m. as stock markets opened in New York. With a few taps on his keyboard, the trader bought 1,500 shares of Ford. Seconds later, he dumped them after it dropped by a penny, losing about $13. "It's an extreme sport," he said.
    —Gordon Fairclough contributed to this article.

    Write to Scott Patterson at scott.patterson@wsj.com
     
    #13     Aug 2, 2012
  4. It has been years since I posted, I came back on the site to see how the day trading world is like today.

    I worked at Swift Trade from 2004-2007. I was doing OK during that period. Eventually, with NYSE changing their rules, I was struggling in 2007 as I was slow to adjust. I was introduced to JC Trading by the guys on the floor in 2007. They offered very good payout and their system was fast and reliable. I traded with them from 2008 to 2010. I was trading part time as I was pursuing a different vocation. I stopped at 2010 when I could not generate any profit.

    Deep in my heart, I have a strong passion for day trading. I made an attempt to do both my current vocation and day trade at Swift (I think it is Orbixa now) again in 2011. I can only manage to break even and I do not have the balls and the skills I used to have to do well even though there were opportunities to make good profits. After three months, I stopped and focus whole heartedly on my current vocation.

    Looking back, I am very grateful to have the years of ups and downs. I am considering to explore day trading in the future if a door is open by God.
     
    #14     Feb 12, 2013
  5. peter beck, RIP
     
    #15     Feb 13, 2013
  6. spending the profits on hookers and blow.
     
    #16     Feb 13, 2013
  7. just21

    just21

    The £8m fine was upheld on appeal a couple of weeks ago.
     
    #17     Feb 13, 2013
  8. guest2

    guest2

     
    #18     Feb 13, 2013
  9. RedDuke

    RedDuke

    I do not trade equities, so may be my questions is plain dumb. But all HTF algos do just that, millions of cancelled orders. What;s the difference between them and swift???
     
    #19     Feb 13, 2013
  10. zdreg

    zdreg

    " I am considering to explore day trading in the future if a door is open by God. "

    forget it if the lefty congress and peronist president pass the ftt (financial transaction tax).
     
    #20     Feb 13, 2013