Swedish fintech vendor Orc Software is shutting down the New York trading desk of its troubled agency brokerage Neonet.
Orc took control of Neonet last year in an all-share deal worth over £100 million designed to combine their respective expertise in derivatives and equities trading technology.
However, Neonet has performed poorly over the last year, prompting Orc to warn in July that exchange rates and low transaction volumes at the unit means it could miss its target of an operating margin of 20% by 2012.
Its problems were exacerbated in August when it emerged that a suspected fraud at a client in Norway could result in a bad debt loss of up to SKr4.7 million.
Then, last week Fredrik Lindqvist was replaced as Neonet CEO by Orc veteran Joacim Wiklander.
In the latest development the unit's New York desk is being shut, with all services run from Stockholm. The move will cost around Skr5 million in the third quarter but cut operating expenses by Skr13 million a year from 2012.