Auriga Holdings LLC, a New York-based institutional trading and asset-management firm, will shut its equities unit after a drop in client activity, Chief Executive Officer Rich Winter said.
The firm is cutting 35 people from equities research, sales and trading, reducing the staff to 50, Winter said today in a phone interview.
“The remuneration from institutional clients is not high enough at this point to support having the staff of analysts and researchers,” Winter said. “Unless you have a full banking group, I think it’s difficult. Businesses right now that are based on what I would call the honor system, where you put out a lot of research and hope guys pay for it, are a challenge in a tough economic environment.”
Average daily trading on major U.S. exchanges is down about 10 percent this year from the same period in 2011, according to data compiled by Bloomberg. The number of firms policed by the Financial Industry Regulatory Authority fell by 54 to 4,402 in May from the end of last year, according to data from the regulator.
Auriga Holdings is a majority-owned U.S. subsidiary of Auriga Securities Sociedad de Valores SA, a broker-dealer based in Spain.
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