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Tribal Broker-Dealer Trades for Three Institutional Clients

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New York Stock Exchange's first ever tribal member, NativeOne Institutional Trading, has begun trading for three institutional clients including CalPERs, the California public employee retirement and health benefits fund, which runs $145 billion in equities, and on behalf of members of Indian Country, including the Navajo Nation and its $1.3 billion in assets, said Dennis Smith, co-founder of NativeOne, to Traders Magazine.

The firm, which officially debuted on Wall Street on Dec 28, 2010, offers buy-side trading to sales desks and equities markets, direct market access and third-party research, according to Traders. Order flow averages about 60 percent high touch and 40 percent low touch, said the firm's head trader Leo Decker. Clients can do business through the firm's trading desk or Bloomberg Tradebook. In addition to Decker, the broker-dealer's New York-based trading desk is operated by industry veterans, such as 22-year-seasoned trader Patrick Forbes on the NYSE floor, and Jim Maguire, Jr., a former NYSE specialist with 28 years of financial industry experience, who manages upstairs trading and order flow jointly with Decker.

The firm is contracting out to build its own algorithms, though it also uses several bulge bracket firms and pulls from Credit Suisse's Crossfinder and UBS's PIN.

NativeOne earned its minority status through Don Lyons, the firm's chief executive, co-founder and majority owner, who is a member of the Morongo Band of Mission Indians. A Navajo Nation member, a Mohegan member, and several other non-American Indian investors hold additional ownership.

When the ownership change is approved by the Financial Industry Regulatory Authority’s (FINRA) National Adjudicatory Council--expected in the next 30 to 45 days, the firm will be 51 percent American Indian-owned; the remaining 49 percent will be allocated to private non-American Indian individual investors. NativeOne is also completing an acquisition for the majority ownership interest in an established NYSE member firm, formerly known as Christopher J. Forbes, LLC, reported Traders.

NativeOne gives a portion of its commissions back to the American Indian community in the form of scholarships, internships, job training and other charitable causes. "We want to help native Americans by educating them, providing job training, giving them access to things they've never had before," Smith told Traders. "We want to help them own a piece of this rock."