2 former rising stars at Lehman Brothers are beginning to revolutionize the way corporate bonds are traded Fintech50
When investment bank Lehman Brothers filed for bankruptcy on Sept. 14, 2008, Mike Sobel and Jason Quinn, two young rising stars in the firm’s fixed income division, were accustomed to long days of hitting the phones and logging onto the Bloomberg terminal in order to message counterparts around the world, scouring markets for trades.
Trumid, little-known outside of specialized corners of the bond market, is quickly becoming one of the most compelling fintech disruptors on Wall Street and it’s returning to Forbes’ Fintech 50 list due to spiking trading volumes and surging user growth. “The process of getting a trade done is still this kind of free-for-all that could happen over Instant Bloomberg, or over the phone,” says Quinn, “Trumid is a digitization of the way bonds have been traded for many, many years.”
After Lehman went under, regulators forced Wall Street to change, slashing the capital available to trading desks to hold assets and make proprietary bets. The Fed’s cut of interest rates to 0% also meant once high-yielding bonds now carry coupons that resemble what checking accounts used to earn. Once sprawling trading desks like UBS’s footfall-field-sized Mecca in Stamford, Connecticut were shuttered.
Last year was a turning point. After earning what Sobel and Quinn deemed to be a critical mass of traders active on their platform, they began to allow traders to negotiate trades on an attributed basis. The innovation meant dealers and bond buyers could continue to cultivate their valuable relationships and get a feel of demand for illiquid securities, while also transacting on an electronic platform. Volumes spiked as activity doubled, then tripled, in the months after the launch.
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