Pipeline Trading Systems

Pipeline Trading Systems LLC operated private equities and options trading systems from 2004 to 2012. As an agency broker, it offered equities traders two methods for trading large blocks of stock with minimal impact on price: a crossing network (also known as a dark pool), and an algorithm switching engine. In 2011, it agreed to settle the action brought by the Securities and Exchange Commission regarding the disclosure of the activities of its liquidity providing affiliate between 2004 and 2010.[1][2][3]

The affiliate implemented a patented market structure invention that used an execution quality rebate to align the liquidity provider's incentives with those of Pipeline's institutional clients.[4] The crossing system earned high marks for execution quality in third party research,[5][6][7] but was shut down in 2012 following the SEC action.

Pipeline was founded by Fred Federspiel, a nuclear physicist and complexity scientist, and Alfred Berkeley, a former president and vice chairman of NASDAQ. Following its settlement in 2011, the company rebranded itself in January 2012 and now operates as Aritas Securities LLC.[8]

References
  1. Patterson, Scott & Strasburg, Jenny. "Traders Navigate a Murky New World," The Wall Street Journal, April 9, 2012. Accessed 4/25/12
  2. Gallu, Joshua & Mehta, Nina "Pipeline Settles with SEC over Dark Pool Claims" Bloomberg October 24, 2011.
  3. DailyFinance (Pipeline press release) "Study Reveals Buy Side Firms Entrust Most Difficult Trades to Pipeline" April 7, 2011.
  4. "US Patent 7996261: Systems and Methods for Increasing Participation of Liquidity Providers on Crossing System". 2011.
  5. "Elkins/McSherry" (PDF). Elkins McSherry LLC. 2008. Retrieved 2013-03-16.
  6. "Ancerno". Yahoo!Finance. 2011. Retrieved 2013-03-16.
  7. "Investment Technology Group" (PDF). Investment Technology Group. 2008. Retrieved 2013-03-16.
  8. "Company Overview of Aritas Securities LLC". Bloomberg. Retrieved 28 February 2015.
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