Man Vs. Machine: Seven Major Players in High-Frequency Trading
Brooklyn-born Vincent Viola, known to friends as Vinnie, has long been a major player on Wall Street. A graduate of West Point, Viola earned his chops on Wall Street in the 1980s as a trader on the New York Mercantile Exchange. In 1987 he started a commodities trading firm called Pioneer Futures.
By the mid-1990s, he was vice chairman of the Nymex. In the 2000s, he ascended to the role of chairman and helped bring the exchange through 9/11 and the collapse of Enron. Viola stepped down in 2004 and spent his time running Pioneer and several other electronic trading operations.
In late 2008, Viola founded the International Derivatives Clearing Group, a clearing platform for interest-rate swaps. Early the next year, he started Virtu Financial, a high-frequency trading operation, in New York.
Viola also has interests outside trading. In 2004, he joined New York property mogul Bruce Ratner, among others, in the purchase of the New Jersey Nets basketball franchise.
Tower Research Capital, the high-speed giant founded by Mark Gorton, sits amid a sprawl of art houses, Chinese bodegas and exotic fashion stores just south of Canal Street in Manhattan. A serial entrepreneur, Gorton is known as something of a creative genius who just happens to run one of the most sophisticated trading outfits in the U.S.
He graduated magna cum laude from Yale University in 1988, then earned a masters degree in electrical engineering from Stanford University before taking a job with a defense contractor working on computerized speech recognition systems. After earning a degree from Harvard Business School, he took a job trading bonds for about five years at Credit Suisse First Boston.
Gorton and CSFB colleague Alistair Brown founded Tower in February 1998, using their own money and cash from friends and family. The firm looked for small anomalies in relationships between securities. Gorton’s hunger for speed was so great that he decided to form his own brokerage to execute his trades, founding Lime Brokerage in 2000. It soon began to cater to other high-speed funds and today is known as one of the most sophisticated brokerages on Wall Street.
Like Manoj Narang, Richard Gorelick, chief executive of Austin, Texas-based high-frequency firm RGM Advisors, has been one of the more vocal defenders of the controversial trading practice.
Gorelick, who sports a law degree from the Georgetown University Law Center, helped found RGM in 2001 along with two computer software developers Robbie Robinette (a physics expert) and Mark Melton (electrical engineering and artificial intelligence).
RGM started trading US stocks but has expanded into multiple markets. The firm is known for its use of machine learning, a branch of artificial intelligence that crunches terabytes of data at high speeds in order to predict what will happen next.