Infinium sued by former employees
High Frequency Trading firms are usually shy about their business, except when filing for an IPO or even better when forced to appear in court. Not everyone in the industry will be familiar with Infinium Capital, but the diversified HFT firm is a Chicago household name. According to Larry Tabb the firm ranked in the top 25 HFT traders.
Sued by 31 former employees
Infinium is sued by 31 former employees, who claim they have been tricked into investing in the company while the the management knew about financial stress and were selling their equity themselves. The group of former employees swapped loans into equity for a total sum of USD 4 million. Ten months later everything was gone, especially after senior class of equity was introduced without their knowledge. People lost as little as 5k to as much as 600k.
- For full details read the 30 page plaintiff, it’s a good read (and a searchable pdf).
Anyway, after reading the plaintiff Infinium looks like a horrible employer. One could say Infinium makes even IMC Chicago look like a great place to work. Nevertheless, not to smart to put all your eggs in one basket, investing heavily in your employer isn’t exactly a hedged bet. I assume more people are hurt in this Employee Capital Pool program, but stay out of the lawsuit as they remain employed with the firm.
Way before the troubles started, Infinium ranked fourth in the Best place to Work in the local ChicagoBusiness.com website in 2009. In 2010 the firm had a software glitch with a brand new algo, creating a spike in oil futures – losing USD 1 million in a few seconds. Not the most expensive glitch, but hard to understand why such a new algo messing up like this (more details: BusinessInsider)
Back to the plaintiff. More nice inside information on HFT. Fast fiber lines, microwave communications, 10 millisecond latency, co-located server racks, double power back up systems : expensive. The firm has more or less fixed monthly costs of USD seven million (page 21). That hurts when revenues drop.
Red flags
The are a number of red flags for trading firms. The most important one is building new state of the art dealingrooms with expensive design. However, organizing these kind of silly flash mobs is an excellent warning sign too. Management getting too comfortable about the business.
first,
it’s not just the new state of the art dealingrooms with expensive designs which in itself is the red sign, it’s the combination with current low profits and lack of long term business investments that is indicative of management hubris, plenty of successful firms transitioned into better facilities during their growth cycle
what’s wrong with the video, don’t say it’s already been deleted, lol
This story will certainly inspire management at Source Capital, in fact they are constantly looking at new ways to screw employees…
help them by submitting your ideas, the winner will get a source employment contract!
and also receive source employee equity, only to be diluted away by losses and higher denominated management and investor equity
And what has happened lately with the various law suits from Tibra employees against Tibra?
Also Source Capital AG has been sued by employees in the past for deliberately lying on realized PL in order to pay less bonus than what was agreed in the employment contract. Source Capital lost the case but agreed to settle out of court to keep this secret. So nothing to learn from Infinium.
Last I heard was that James Tydeman got told to get a lawyer.
Well Tibra paid Grace and Vas to go away. JT haven’t heard anything since he took his mum to court. I hear Savage may have overplayed his hand and ended up not getting anything. Anyone got any word on what happened with Danny and Glenn? Last I heard they were taking Tibra to arbitration over changes to shareholder agreement. Is Muirhead still doing anything in regards to legal action?
do you have more details on changes to shareholder agreement that Danny and Glenn are taking Tibra to arbitration over?
Management looked at this video and concluded HR hired a bunch of idiots. Idiots that probably won’t mind buying worthless equity.
That link to IMC is from 2011, it must be a lot better now right?
that imc link is just one in long history of imc stories, at one point imc almost got this site shut down and went complaining to the respective employers of whose employees had posted comments on this site, it’s a fucked up world
10 miliseconds latency is pretty bad even for 2009 (given the fact they were in colo at CME)
you don’t have to be modest, you are clearly not junior
.5-1.5 miliseconds in 2004
http://www.smh.com.au/business/secret-email-lifts-lid-on-richlister-plans-court-told-20120704-21hmm.html
come on somebody beat that pls
am sure messaging speeds have gone much beyond that for several firms especially on Eurex.
Would expect Asian Exchanges to be second and American ones to lag way way behind given that pits are still active on the CBOE and NYMEX.
i’d say that on xetra, eurex, euronext cash and liffe it’s not that good to be at double digit microseconds. although sometimes queues are built at the exchange that last more than 100 miliseconds to clear (for the eexchange to process)…
so someone is trying ‘junior’ as a brand, dick johnson jr
Saving a few guys Googling
pico second > Nano Second > micro second > milli second > second
> stands for faster
some say they can do it in nanosecond range:
http://www.itnews.com.au/News/358685,low-latency-network-switch-pushes-high-frequency-trading-limits.aspx
I pretty much doubt this works when you need to quote tens of thousands of options…
(don’t jump to conclusions, I’m no aussie, the website is)
and the dude is german. Don’t surprise me, they make the best machines.
you are french?
Of course I am French! Why else would I be speaking with zis outraaaageous accent? Silly Arthur King and your English knights!
why are you assuming the other guy to be english?
@1:56 don’t you recognise a Monty Python quote when you see one?
take a guess?
okay, the video is finally working, who came up with this g@y stunt and what’s it doing over there in that city, frisco sure, not in chicago, haha
And why did Holland style orange dildos didn’t get enough footage?
rumour on the settlement is more likely to be false than true.
They got enough cash on the balance sheet to worry about getting another 5%, meanwhile if a competitor gets pushed out on a lawsuit……………
Calling Tibra a “competitor” at this point gives them a bit more credit than they deserve, don’t you think? Also some of the initial rabid hate for Tibra has probably dissipated and/or been diluted over the intervening years. Both sides are well and truly sick of the charade at this point. Not saying the rumours are necessarily true – just that it’s a bit more plausible than you might think.
5% of big pile is lot in absolute number, remember we are talking about dutch here, 400k is supposedly a fortune, also 5% > 0%, tibra being a non-competitor at best should be obvious if their liquidation is being speculated
A better view of the mob http://www.youtube.com/watch?v=hgo-XSoKrVE
2011 IMC was a lot better than the 2014 IMC. Infinium is even better than IMC. Heck N. Korea seems like a better place.
Waiting for all the folks who left IMC after BonusGate to sue Defares and his insecure boys.
What’s bonusgate?
if n. korea seems like a better place, you should go try that, the exit door is on your left
bonusgate is when a supposed bonus list was leaked out to this site listing multi-million payouts over two years for top imc employees, imc got this site almost shut down and went out to the companies from where the comments etc were being posted
why did all the folks left imc after bonusgate?
coz they don’t need to work for the $’s
tis a bit difficult for the passenger mentality to understand, but people who resign, mostly do because they can. Everything else is trivial.
how do you mean they don’t need to work for the $’s?
what is passenger mentality? just because it’s bit difficult to understand, doesn’t mean it can’t be done with bit of effort?
And if everything else is trivial, why is the resignation being linked to bonusgate, back to causation vs correlation?
calling it a ‘flash mob’ doesn’t change it from being a g@y ass synchro musical, not there is anything wrong with it, it is what it is
calling it a ‘flash mob’ doesn’t change it from being a g*y @ss synchro musical, not there is anything wrong with it, it is what it is