New York Mercantile Exchange (Nymex) has watched its
strategy to invest in brokerage Optionable blow up in its face
as the brokerage firm first lost it largest customer and is now
embroiled in an embarrassing admission that its co-founder and
chief executive was convicted of credit card fraud seven years
Kevin Cassidy, who resigned from the top executive position
on 12 May, was sentenced to 30 months for credit card fraud in
1997. He also served six months for tax evasion in 1993.
That, combined with Bank of Montreal (BoM), suspending its
relationship with Optionable after it reported energy trading
losses of $407m last month, has led Nymex to distance itself
from the firm. Nymex had taken a 19% stake in the company for
$27.6m in January with an option to hold as much as 40% (see FO
Week Vol 12 No 4). Nymex purchased the stake for the firm's
options trading technology and options order flow that ran
through its ClearPort trading platform. A week after standing
by Optionable, Nymex has now backed away.
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