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Local buyers to reopen Madoff brokerage
June 18, 2009 03:18 PM Email| Comments (1)| Text size – + The local buyers of convicted Ponzi scheme operator Bernard Madoff's former brokerage have renamed the business Surge Trading Inc. and plan to reopen in the same midtown Manhattan office tower where the firm operated before scandal overtook the investment side of Madoff's business.
The deal, which could fetch up to $25.5 million for Madoff's victims, was completed today. The firm is still awaiting approval by the Financial Industry Regulatory Authority, but its principals are working on the business in hopes that by August, they'll be actively placing stock trades for clients like big-name Wall Street brokerage houses and smaller regional brokers.
Surge has attracted some big names from the brokerage industry, as previously reported by the Globe. They include chief executive Frank J. Petrilli, the former chief of brokerage TD Waterhouse, and Robert P. Mazzarella, a former president of Fidelity Brokerage Services in Boston, who will be nonexecutive chairman of the new firm. They said they hope to pick up where the old firm left off, and to attract new clients among hedge funds and investment managers.
"Like everybody, we have to prove ourselves,'' Mazzarella said. He thinks the market's hunger for liquidity will prove greater than any taint remaining from the Madoff legacy.
The operation will rehire a number of people from the former Madoff brokerage -- perhaps as many as 50, Petrilli said -- and decided to stay at the trading floor in the Third Avenue location, called the Lipstick Building (for its shape and color), because the technology and infrastructure are still there.
Despite the potential challenges of wooing back old customers and finding new ones, Petrilli said he saw this as an opportunity. "The brokerage-related business is in my blood," he said. "To get back in the Wall Street arena was very exciting for me."
Mazzarella said the new owners are carefully vetting the people they rehire. "The folks that are working there by and large are good people. They were just caught in something that they were totally unaware of,'' he said.
The firm -- which will make markets in Nasdaq- and New York Stock Exchange-listed stocks -- will compete against the likes of Knight Securities and Citadel Securities. The new group of investors, who include Darin Oliver of Medfield and venture capitalists at Fairhaven Capital Partners of Cambridge, agreed to pay $1 million in cash up-front and as much as $24.5 million more by December 2013, based on the business's revenues and profits. (By Beth Healy, Globe staff)
Greensboro Lawyers , Connecticut Banks
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