ConvergEx Resolves SEC and DOJ Investigations

Dec 18, 2013, 15:19 ET from ConvergEx Group

NEW YORK, Dec. 18, 2013 /PRNewswire/ -- ConvergEx ("ConvergEx" or the "Company") has resolved the previously disclosed parallel investigations by the United States Securities and Exchange Commission and the United States Department of Justice, which the Company publicly announced in December 2011.

These investigations focused on the routing of certain global trading and transition management customer orders to the former Bermuda trading desk of ConvergEx Global Markets ("CGM") where they were net traded, and the misconduct of former employees who, at times between 2006 and 2011, concealed this activity and the compensation earned by CGM on those orders.  The employees who engaged in this misconduct are no longer at the Company, the Bermuda trading desk of CGM was shut down by ConvergEx, and the activity associated with these investigations was discontinued two years ago.  ConvergEx has also significantly enhanced its policies, procedures and controls in order to prevent anything like this from ever happening again.

The SEC and DOJ each commended ConvergEx for its substantial cooperation throughout the government's investigations and highlighted the significant remedial measures undertaken by the Company.

The overwhelming majority of ConvergEx's equity execution business clients and customer orders were not affected by the conduct described in the resolutions.  Specifically, fewer than 5% of equity execution clients and less than 1% of orders were routed to CGM and net traded.  As the SEC Order itself states, the conduct at issue did not involve the following businesses of ConvergEx Execution Solutions, G-Trade Services, or their affiliates:  U.S. Program and Sales Trading, Options Services, Prime Services, ATSs, Commission Management and Recapture Services, Clearing or Technology.  The proceedings also did not involve orders executed through ConvergEx's Direct Market Access platform.  Additionally, numerous ConvergEx subsidiaries, including Westminster Research Associates, ConvergEx Prime Services and LiquidPoint, were not named as parties to either resolution.

ConvergEx Group Chairman and Chief Executive Officer Joseph M. Velli said, "The credibility of our company and the trust our clients place in us have always been our most sacred assets.  By resolving these matters, we have accepted responsibility and deeply apologize to those customers who were adversely affected."

Mr. Velli noted, "Looking to the future, ConvergEx is financially sound with no debt, and the net capital levels of our broker-dealers will not be affected by payment of the resolution.  With more than 600 dedicated employees and a diverse mix of best-in-class products and services, ConvergEx is well-positioned to move past these legacy matters, grow its business and expand its position as a market leader."  ConvergEx noted that the parent company, ConvergEx Group, LLC, is funding the financial components of the resolutions.  Mr. Velli continued, "We are confident that we will go forward as a stronger, better and wiser company."

About ConvergEx Group

ConvergEx Group is a leading provider of global brokerage and trading‐related services for institutional investors and financial intermediaries.  ConvergEx combines client‐first service with innovative products, sophisticated strategies and proprietary technology to meet the challenges of increasingly dynamic and fast‐paced markets.

Headquartered in New York with a presence in several other key locations including London, Chicago, San Francisco, Boston and Atlanta, the company serves more than 3,000 clients accessing over 100 global market centers.  ConvergEx Group includes ConvergEx Execution Solutions LLC (member NYSE/FINRA/SIPC); LiquidPoint, LLC (member CBOE/SIPC); G‐Trade Services LLC (member FINRA/SIPC); Westminster Research Associates LLC (member FINRA/SIPC); ConvergEx Prime Services LLC (member FINRA/SIPC); ConvergEx Solutions LLC, of which ConnEx, Jaywalk and LDB are divisions; and ConvergEx Limited in the UK and Australia. ConvergEx Group, LLC is a subsidiary of ConvergEx Holdings, LLC.

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Margaret Farrell



SOURCE ConvergEx Group