Boutique Broker Dealer Topeka Capital Markets Said to Close Firm


Topeka Capital Markets, a NY-based research boutique with around forty employees, is reportedly closing its firm, according to an unconfirmed report on the Bloomberg terminal.

The Bloomberg article said it obtained an email sent June 1st from CEO and founder Michael Jackson saying that the firm was to be closed immediately.  The email cited “increasingly stiff headwinds” over the past several months and a failure to raise growth capital.  However, Jackson has not confirmed the email and the story has not been broadly released.

Topeka Capital Markets employed nine research analysts covering Healthcare IT & Services, Industrials, Internet, Media & Entertainment, Oil and Gas Exploration & Production, Retail Hardlines, Semiconductors, and Transportation.  The firm had 17 sales and trading staff.  The firm had an active events program including corporate access, marketing days, road trips and conferences.

The firm was founded in 2010 by Michael Jackson, a former Goldman Sachs institutional salesperson, and Peter Herbert, a former Goldman cash equities executive.  Joy Malone, Topeka’s director of research, had been head of sales for research aggregator Soleil Securities before co-founding independent research boutique Blue Water Capital.

Our Take

With its trading desk, Topeka relied primarily on commissions for its revenues.  In the low volume trading markets beginning in the fourth quarter of last year, commissions have been challenging for all cash equities players, from the largest on down.

The signals from Europe are that unbundling of research payments from equity commissions will have an impact on the US, even though the US safe harbor for bundled commissions remains intact.  At a minimum, larger asset managers are likely to embrace broader use of commission sharing agreements which concentrate trading in fewer, often larger, counterparties.  Firms like Topeka with smaller trading desks are especially vulnerable to an increased use of CSAs, cutting revenues by as much as 50%.  Under this scenario, the prospects for an improving environment were dim for the firm.


About Author

Sandy Bragg is a principal at Integrity Research Associates. He has over thirty years experience as an investment research professional. Prior to joining Integrity in 2006, he was an Executive Managing Director at Standard & Poors, managing S&P’s equity research business and fund information properties. Sandy has an MBA from New York University and BA from Williams College. Email:

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