RJ O'Brien Hires Former MF Executive In Retail Trading Push
March 20 2012 - 1:40PM
Dow Jones News
RJ O'Brien & Associates has hired the former head of retail
futures trading at MF Global Holdings (MFGLQ), just months after
holding discussions to buy the unit from the now-failed
brokerage.
Chicago-based RJ O'Brien has emerged as one of the largest
players in the U.S. retail futures market after taking over
customer accounts from MF Global, long a specialist in the
individual trader sector.
The company said Tuesday that it had hired Mark Sachs, formerly
president of MF Global's Lind-Waldock retail unit, as executive
vice president of sales and marketing. He will build up RJ
O'Brien's private-client division and develop new customer outreach
efforts across the company.
MF Global had built a market-leading retail presence through a
series of acquisitions, but the fallout from its failure depressed
volume across the industry because of concerns about client-fund
safeguards.
"The shock and awe [of MF Global's collapse] had a near-term
impact on retail trading," said Gerald Corcoran, chief executive of
RJ O'Brien, in a recent interview. After a sharp slowdown in
December, Corcoran said individuals' futures-trading activity in
March "is looking to be back to normal."
Corcoran said that last summer his firm held "high-level"
discussions about acquiring MF Global's retail franchise, at a time
when regulators were talking to the New York firm about increasing
its level of capital held for regulatory purposes to cover
sovereign-debt trades.
RJ O'Brien wound up securing much of the business at little cost
in November, when it took on the bulk of the 36,000
futures-customer accounts shepherded away from MF Global during the
first week of November. Since that time the firm has also hired
about 125 brokers and staff from MF Global.
Taking on both retail and institutional business from MF Global
vaulted RJ O'Brien into 11th place among U.S. futures brokers,
ranked by customer assets on deposit, according to data from the
Commodity Futures Trading Commission. MF Global's demise added
about $2 billion in customer assets to lift RJ O'Brien's total to
$3.7 billion by the end of 2011.
"The vast majority of [MF Global's] customers have stayed with
us," Corcoran said.
RJ O'Brien's consolidation of retail-level futures business
comes as online brokers like TD Ameritrade (AMTD), Charles Schwab
Corp. (SCHW) and Tradestation have sought to develop their own
offerings, though futures remain much more lightly traded by
individuals than stocks, options and currencies.
About 1.2 million individual investors last year actively traded
futures in the U.S., according to research firm Aite Group,
compared to about 13 million retail traders of stocks and
exchange-traded funds.
Futures trades made up an average 7% of daily trading activity
among TD Ameritrade customers in the fourth quarter of 2011, up
from 5% a year before, according to the company. Stock options in
the fourth quarter last year accounted for about 27% of daily
trades.
Sachs was president of Lind-Waldock for about 10 years,
overseeing one of the jewels in MF Global's portfolio of brokerage
businesses. The unit traces its history to 1965; it was acquired by
Chicago-based brokerage house Refco in 2000, before that company
failed in 2005 and the asset was sold to MF Global.
-By Jacob Bunge, Dow Jones Newswires; 312 750 4117;
jacob.bunge@dowjones.com
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