Citigroup to buy Lava Trading

Citigroup to buy Lava Trading

Citigroup is to acquire New York-based Lava Trading, a provider of direct access securities dealing software, for an undisclosed sum.

Under the deal, Lava Trading will become a wholly-owned subsidiary of Citigroup, but the bank insists the vendor will continue to operate independently and will remain at its headquarters in New York.

Richard Korhammer will continue as CEO of Lava Trading, reporting to James Forese, managing director and head of Citigroup Global Equities.

Korhammer says: "With the resources of Citigroup behind us, our opportunities to move into new product areas and expand our services to meet global demand for electronic trading and execution capabilities are unlimited."

Citigroup says the acquisition provides it with an electronic execution system to offer its institutional clients. Commenting on the deal, Forese adds: "With this move, we will catapult to a leading market position in electronic execution - which currently accounts for a significant and growing portion of total trading volume."

But the acquisition does have implications for other banks that are currently using Lava's technology, such as JPMorgan which recently agreed a two year contract for the vendor's ColorPalette order management system.

Lava Trading has also been involved in high-profile litigations. The vendor filed a lawsuit against the UK's royalblue Group in June last year for alleged patent infringement of its consolidated trading technology.

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