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Allston Trading, LLC

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Founded in 2002 by former CME floor traders, Allston Trading is one of the world's leading electronic trading and market-making firms, providing liquidity in global energy, commodity, currency and financial futures markets. Allston is owned by its current and former employees, retired founders, and long-term institutional backers Sequoia Capital and Francisco Partners. [1]

The firm is a member of the Principal Traders Group, an affiliate of the Futures Industry Association.[2]

History

Allston was co-founded in 2002 by futures traders Bob Jordan, Elrick Williams and John Harada.

In September of 2012, Allston named Raj Mahajan, former Goldman Sachs partner and SunGard executive, as CEO, replacing Carlton Jones, who moved to chairman and also retained the title of president.[3]

Mahajan returned to Goldman in January 2015, whereupon the CEO title was returned to Jones.

Also in January 2015, the firm announced it had stopped operating in the U.S. stock market in order to concentrate in the more profitable derivatives markets. Allston had previously been named as one of the high frequency trading firms under investigation by the Securities and Exchange Commission and New York Attorney General Eric Schneiderman.

Legal Issues

In 2014, Allston was the subject of an arbitration case filed by HTG Capital Partners, who accused the firm of violating CME Group's new rule against spoofing and

other disruptive trade practices.[4]

In March of 2015 it was reported that Allston was being investigated by the U.S. Commodity Futures Trading Commission for alleged market manipulation. The CFTC subpoenaed CME Group Inc. for information on the firm.[5]

On May 18, 2015, Mark Mendelson, a member of the Chicago Board of Trade, filed a lawsuit in the Northern District of Illinois against Allston and one or more of the firm's traders ("John Does 1-10"), accusing the firm of engaging in "spoofing" and other unlawful trading practices in the Treasury Bond Futures market. View the lawsuit here: File:Allston Trading Spoofing Lawsuit.pdf In his complaint, Mendelson cited the report that the CFTC was investigating Allston.

Allston won dismissal of that case in August of 2015 and also resolved the arbitration case filed by HTG.[6]

Key People

John Lothian News Interview

Raj Mahajan, Allston Trading CEO, Talks HFT and the Business of Prop Trading Raj Mahajan took the reins at Allston Trading as CEO in September 2012 and has spent a good deal of his time looking at the issue of high frequency trading (HFT). Allston has been one of the proprietary trading firms who has been willing to publicly discuss HFT, regulation and the future of that form of trading. Mahajan spoke with JLN’s editor-in-chief Jim Kharouf about HFT as well as the business challenges and opportunities for prop firms.

References


Category: Trading

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