The CEO of Tradescape recently got let go and the MKXT ECN's are shut down. Hum, do I smell a scandel???? Nice Job Etrade, couldn't pick a worse company to buy.. I'm short ET and riding it to zero. Omar
Omar, Where did you hear this? Both companies and their web sites appear fully operational. Thanks, JD
MKXT was shut down but they were not purchased by E*Trade anyway. E*Trade purchased Momentum Securities and Tradescape's trading platform. Don't know the status on Omar Amanat, though.
I have heard thru friends that Omar has been going around trying to buy volume for tradescape thru various different deals. Supposedly a big portion of his pay was based on future volume, so he was going to pay for the volume so he could hit his higher paying break points.
I heard the same regarding purchasing the volume...wonder if ticket deal will get better in order to get more traders.....anyway the firm is doing fine atleast when I left today at 4:00.
Here's the deal. They claim MKXT/LSPD ecns are down due to techincal glitches, but the reality is, it's shutdown for now. Etrade is doing their accounting (which is normal after the merger) and see what's the big debt was. MKXT was a losing venture, the vol was about a million shares when they started the program but later on, they found a way to illegally pump up the vol. The vol went from 1 million to 10 million. Most of the vol was generated internally and Tradescape corp was eating the losses so they can jack up the xt vol. Then they decide to hire a group of traders just to trade MKXT and pay them via Rebate program. That's when you saw those bs MKXT size orders locking up stocks like wcom, nxtl, sunw, mfnx, etc. They made pennies so they can generate the rebate and get paid by the participants. Here's the problems 1) no one was paying them 2) they were taking losing trades to generate volume 3) The ECn was #2 or #3 at one point and no one knew what LSPD ecn was. Etrade realized they made a big mistake and fired Omar Amanat immediatly when they found so of the funny account. This is only the beginning Good trading all
NEWS ALERT MARKETXT HALTED; E-TRADE AUDITS TRADESCAPE By Isabelle Clary Senior Staff Reporter MarketXT, the electronic communications network that roared on Nasdaq's SuperSoes auto-execution system, has stopped trading since July 30, soon after switching clearing firms to Penson Financial Services from SWS Securities. A spokeswoman for MarketXT said the stoppage was due to a technical problem. "As the separation with the E-Trade businesses continues, we are moving our data center and server systems to an independent location....We are opting to keep the ECN closed until all technical issues are resolved." According to industry sources, MarketXT owed SWS Securities $2 million in unpaid fees when it made its move to Penson. This prompted SWS to complain to regulators responsible for ensuring that U.S. broker-dealers comply with rules, such as net capital requirements, sources said. SWS Securities, to which MarketXT had switched from UBS PaineWebber seven months ago, declined comment. In June, E-Trade acquired Tradescape Corp., the parent of MarketXT, Momentum Securities, an electronic broker for professional traders, Tradescape Securities, a direct-access broker for active online traders, and Tradescape Technologies. The merger, valued at up to $280 million, did not include MarketXT. "E-Trade has auditors currently going over the Tradescape books," a spokeswoman for E-Trade confirmed, adding that this was not an uncommon practice following a merger. Tradescape CEO Omar Amanat, who had taken the position of head of institutional trading at E-Trade, recently left the company to return to MarketXT. His move coincided with E-Trade's reassessment of the value of the Tradescape acquisition. The E-Trade spokeswoman also said the company never comments on staff changes. E-Trade bought Tradescape for $100 million in stock, plus up to $180 million in stock, if Tradescape topped profits targets. E-Trade, traded on the New York Stock Exchange, had expected Tradescape to contribute 10 percent to earnings growth in 2003. Softbank is a major investor in both Tradescape and E-Trade. MarketXT, the first ECN to join SuperSoes in December 2001, quickly soared to the top spot among SuperSoes liquidity providers. But soon after E-Trade's acquisition of Tradescape, MarketXT saw its volume drop, which industry sources said reflected the fact that Momentum Securities was no longer sending order flow there. A number of former Momentum clients also claim that the broker owes them money for past trading activity, sources said.