Financial technology vendor Orc Software has shut down the New York based trading desk of Neonet Securities.
In a release today, Orc said the closure of the U.S. trading desk would not impact customers’ ability to trade European and North American markets. All clients will be offered continued full execution and settlement services from the Stockholm office.
”By consolidating all of our operations to Stockholm we will be able to serve our clients even better. This is one of many ongoing initiatives to solidify our position as the premier execution service provider in Europe” stated Joacim Wiklander, CEO of Neonet Securities, in today’s announcement.
Orc took control of Neonet last year in an all-share deal worth over £100 million designed to combine their respective expertise in derivatives and equities trading technology, as reported by Finextra. However, Neonet has performed poorly over the last year, prompting Orc to warn in July that exchange rates and low transaction volumes at the unit means it could miss its target of an operating margin of 20 percent by 2012, said Finextra’s story.
Its problems were compounded in August when it emerged that a suspected fraud at a client in Norway could result in a bad debt loss of up to SKr4.7 million.
Then, last week Orc veteran Wiklander as a replacement for Neonet’s CEO Fredrik Lindqvuist. In the latest development, Orc said that all trading would be run out of Stockholm. The restructuring move would cost 5 MSEK in the third quarter 2011 and cut operating expenses by13 MSEK a year when it takes effect no later than the first quarter of 2012.