By Lynne Marek July 03, 2012 (Crain's) â Chicago trading firm Breakwater Capital LLC pushed out its former CEO last month and cut about half of its employees in the wake of a trading loss and amid a challenging market, according to people familiar with the situation. Former CEO and Managing Partner Tom Rubio, who was instrumental in building the firm, exited last month, according to the sources. While he didn't place the bad trade, he took responsibility for the team that did, the sources said. Breakwater's general counsel, Walter Yurkanin, declined to comment. The firm, also known as Breakwater Trading, had about 80 employees earlier this year but has cut about 40 of them, leaving its office space at Willis Tower with a lot of empty desks, the sources said. Breakwater, which focused on trading in treasury futures and options and the cash treasury market, has approached other firms about possibly joining forces in some fashion as the firm seeks to restructure in the wake of the multimillion-dollar trading loss, the sources said. The firm was exploring such possibilities even before the loss, some sources said. The decline in interest rates in recent years and a drop in trading volume and volatility this year has created a challenging trading environment for a lot of Chicago trading firms. They have had to take on more risk to follow their historical trading strategies, while absorbing rising technology, talent and regulatory compliance costs. In 2006, Breakwater sought to merge with another Chicago trading firm, Peak6 Investments L.P., but that union never materialized, despite a news release from the firms announcing the combination. Breakwater was founded in 2001. Read more: http://www.chicagobusiness.com/arti...former-ceo-about-half-its-staff#ixzz20WFqbSjq Stay on top of Chicago business with our free daily e-newsletters
Day trading just doesn't work. Eventually day traders die. They may make a little money today, but tomorrow they will lose more. Just look at the Journal section's Trade P/L thread, many day traders came and disappeared. None lasts. They will all die sooner or later. Small traders lose, they just lose.
So what's the rumor on what the bad trade was? I love hearing these kinds of stories. They are like those scary stories people tell around the campfire, like: "... and THEN, the liquidity disappeared and the only bid was a scared, ashamed, lonely and hungry 100 shares. All the memories of years gone by flashed before its eyes: the first time it got split, the time when it was freshly issued, the day of the wedding and its first merger. It was all coming to a dreary close, a desperate bid from a retail trader, one of the 90% that lose -- that just lose!"