Ex-Refco Trader Priston Shuns Man Group for New Firm
Jan. 5 (Bloomberg) -- Refco Inc.'s biggest independent futures trader, Andy Priston, is starting a firm in Montreal with nine ex-Refco colleagues, after shunning an offer from Man Group Plc, which bought the collapsed broker's main assets in November.
Priston, 28, is setting up the unit for CFT Financials Ltd., a London-based futures trading company. He plans to hire as many as 15 more traders in Montreal, Priston said in an interview. The city offers tax breaks to trading firms to attract businesses.
Refco was the fourth-largest U.S. futures broker before its Oct. 10 disclosure that former chief executive Phillip Bennett hid $430 million of debt. London-based Man Group, which paid $323 million for Refco's futures business, offered Priston a role running the broker's trading unit in Montreal, which he declined.
``Man is a big and bureaucratic place, so it takes time to get things done,'' Priston said. ``Futures traders are very short-term in nature and so need to be nimble on their feet.''
Man spokesman Lachlan Johnston declined to comment.
Priston has an estimated wealth of 10 million pounds ($18 million), according to the U.K.'s Sunday Times ``rich list.'' Renowned for the size of his trades, dealers nicknamed him Braveheart after Mel Gibson's hero in the movie of the Scottish uprising against English rule.
CFT is a so-called trading arcade, a business that rents space to self-employed traders and hires people to speculate with the firm's cash. They make money from fees to settle trades and the charges they levy for the use of their trading facilities.
Refco Trading Services
Priston bought and sold more futures contracts than any other independent dealer at Refco Trading Services, the London- based arcade business with offices from Gibralter to Miami, according to Andrew Duncan, who was chief operating officer at RTS until September last year. Duncan is now a CFT consultant.
CFT hopes to attract traders to Montreal because of a 75 percent tax holiday given to firms and employees that trade international securities in Quebec's largest city, Priston said.
The trading firm is a joint venture with First Continental Trading LLC, a Chicago-based futures broker that clears, or guarantees, the company's trades. CFT aims next month to double the number of independent traders in London to 34, Nick Cella, 26, a partner at the firm, said in an interview.
CFT plans to open an office in Beverly Hills, California, in the next two months, and then Moscow, Hong Kong and Shanghai to trade contracts on currencies, interest rates and commodities, Priston said.
Global Trading
Global trading in futures and options rose 23 percent to $357 trillion in the third quarter compared with the same period a year earlier, according to the Bank for International Settlements. Futures are agreements to buy or sell assets at a set date and price, while options provide the right, though not the obligation, to do so.
Man sold Refco's European operations in November to Marathon Asset Management LLC because of an overlap with its own businesses.
Refco lost staff since it filed for bankruptcy in October. BNP Paribas SA hired a seven-member commodities trading team from the broker in December, while investment bank JPMorgan Cazenove picked up a sales team advising hedge funds on arbitrage strategies. In November, Refco sued eight former traders and the firm that hired them, claiming they stole customers.
To contact the reporter on this story:
Hamish Risk in London hrisk@bloomberg.net
Last Updated: January 5, 2006 10:25 EST |
