HIGH/LOW

So you started out in the defense industry?

Yes at Stanford I got a masters in electrical
engineering. I then got a job at Martin Mari-
etta [now part of Lockheed Martin] working
on speech recognition and communication
signal processing. I worked there for two years
before going to Harvard Business School.
You had nothing to do with trading then?
I didnt know that world existed.
preaches by riding his bicycle to work. In ad-
dition to locking horns with bureaucrats over
bike lanes and congestion pricing, he has ran-
kled the music industry with his file-sharing
company, LimeWire.
In early April, Gorton sat down with Trader
Monthly on the roof deck of his headquarters
to discuss the initiatives that have made him a
force to be reckoned with and find out what
comes next on his to-do list.
MORE OFTEN THAN NOT,
the entrance to a Manhattan
brokerage firm greets visitors
with a dull logo on tall glass
doors, separating them from the receptionist
in a cold, intimidating manner. Not so the en-
trance to Lime Brokerages Tribeca office. Its
adorned with peaceful Buddhist statues and
lush greenery that transform the industrial loft
space into a kind of Shangri-La.
Presiding over this trading palace is Mark
Gorton, founder and chairman of the 200-
employee Lime Group, which comprises a bro-
kerage arm and a hedge fund, Tower Research
Capital, among other entities. You spend a lot
of time at work. Why not have the nicest work
environment you can? says Gorton, a 41-year-
old electrical engineerturned-trader. He co-
founded his $100 millionplus quantitative
fund a decade ago after a four-and-a-half-year
prop-trading stint at Credit Suisse. That, in
turn, led him to Lime.
After having trouble finding a broker to
cater to Towers high-volume stat-arb trading
strategy, Gorton and his cofounder, Alistair
Brown, a software developer, set out to start
their own. In less than a decade, Lime Broker-
age has set the bar for speed in block equities
execution. Its system can now handle up to
4,000 orders per second. During the first quar-
ter of 2008, Lime averaged 372 million shares
a day; in one exceptional session, it executed a
mind-bending 750 million shares.
What Gorton has done outside of trading is
equally impressive. In 2000, the wiry serial
entrepreneur founded the Open Planning
Project, a technology-driven nonprofit orga-
nization encouraging civic engagement. He is
an outspoken advocate of transportation re-
form in New York and practices what he
Speed Merchant
Presiding over one of the fastest platforms in the business, Limes
Mark Gorton is taking his quant edge to new limits BY CHRIS GILLICK
THE ASK
KEY LIME GUY:
Lime Groups Mark
Gorton has juice
across a number
of industries.
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TRADERDAILY.COM JUNE/JULY 2008
(LEFT) DAN MATHISSON
HEAD OF GLOBAL ADVANCED
EXECUTION SERVICES CRED-
IT SUISSE, NEW YORK
(RIGHT) MANNY SANTAYANA
HEAD OF AES GLOBAL SALES
CREDIT SUISSE, NEW YORK
TOP
TRADING
CITIES
OUR SECOND ANNUAL RANKING
OF THE WORLD'S 5u BEST PLACES
FOR RULING THE MARKETS
UPTOWN MOVES DOWNTOWN:
REBUILDING WALL STREET
GASPARINO: INSIDE
THE BEAR MAULING
WALES'S TALE: FROM
TRADING TO WIKIPEDIA
CREDIT SUISSE'S
ALGO JUGGERNAUT
THE RESURRECTION
OF JONO STEINBERG
LIME'S MARK GORTON
TALKS FAST, TRADES FASTER
THE FINEST:
PENTHOUSE SUITES
DUAL-TIMER WATCHES
TUSCAN WINES
6uu-HORSEPOWER CARS
ware to enable public participation in the
democratic process, increase the transparency
of government, the efficiency with which gov-
ernments interact with people and bring com-
munity groups together. Theres a particular
focus on reducing traffic in New York City and
making the streets more livable.
Is it safe to say that youre not pleased that
Mike Bloombergs congestion-pricing plan
for Manhattan didnt pass at the state level?
Yeah, Im pretty bummed out about that.
Was the Open Planning Project involved in
that effort?
Yes. We have this thing called Streetsblog.
When congestion pricing passed the New York
City Council, Crains published three winners
and three losers, and Streetsblog was one of
the winners.
Shifting gears to another of your interests,
what has been the music industrys reaction
to LimeWire?
There are significant parts of the record indus-
try that dont love LimeWire. Were involved in
litigation with some of them. But there are lots
problem than a hardware problem. The real
limiting factor on Lime Brokerages growth is
our ability to hire programmers fast enough.
Speaking of hiring, where do you go to find
your talent?
The main office for engineering is in our
Waltham office, outside of Boston. We tap into
that geographic network, particularly from
MIT and other tech companies.
What about India?
Id like to think I have single-handledly accel-
erated the wage inflation for IIT [Indian Insti-
tutes of Technology] computer-science gradu-
ates. When I started going over there, Lime was
practically the only Western company recruit-
ing. Now you have Deutsche Bank, Goldman,
Yahoo, Amazon, Google, McKinsey, etc. Its
unbelievable how competitive it has gotten.
That market inefficiency closed very quickly.
Where do you stand among your competi-
tors Instinet, Liquidnet, the banks?
I think we occupy a different niche than those
guys. I think for the traders who are very seri-
ous about having the fastest connectivity to the
Was business school helpful?
To some extent. I got a job at [Credit Suisse]
First Boston, which Im not sure I was more
qualified for after business school, but I
wouldnt have gotten the interview without it.
Did you enjoy your time at CSFB?
Yes, I really did. It was a good place. I worked
with a lot of good people there. One of the
things I realize now is that [CSFB] was a big
corporation, they did a lot of things right, but
there was corporate dysfunction. I very much
valued the freedom to just sit around and com-
plain about the status quo with my peers. But
I cant do that anymore. Now that I have my
own place, if anythings wrong, its my fault.
When you started Tower Research Capital,
was it all your own money?
We started out with my own money, as well as
money from friends and family. We later raised
more from the outside.
Has Tower ever had a down year?
No.
Lime Brokerage, then, was founded to cater
to funds like Tower.
At Tower we were doing automated equity
trading. We were having a very hard time find-
ing a brokerage firm that could handle our
trading in terms of both volume and costs. I
realized that if we were having this problem,
then other people in this world were having
this problem. So we basically had to build this
system ourselves.
Surely theres a Chinese wall between the two.
Yes. Actually, its more of a Scottish wall. My
partner, Alistair, is a Scot. Tower and Lime
Brokerage are completely separate. Lime Bro-
kerage is actually moving to a different build-
ing in the next few months.
Have you had to continually reinvest in
your infrastructure?
We are now on our third complete rewrite of
our core trading server. As message volumes
keep going up and up, there is always some part
that is getting stressed. Its more of a software
of people who recognize that the Internet is a
fact of life that has changed the way the music
business works. They see file sharing as an op-
portunity to reach music fans. Were having
talks with very senior people at the record com-
panies who are really excited about working
with LimeWire. It offers oppor tunities that the
music industry has never seen before. But
[striking a deal] is definitely a slow process.
Whats the next project youre looking to
get involved in?
I have a list of ideas, but the hard part is just
doing them. Everything takes work, and
somehow I get busy staying on top of the
current list of stuff.
market, Lime provides things that those guys
dont. But they do things that we dont do: If
you want to send to big block orders through,
the banks are better than us. If you want fast
computerized execution, were better.
Do you even have any competitors, then?
I wouldnt say that, but when customers find
us, I think its such a good fit that they just
say, This is it.
Do Tower and Lime Brokerage fund these
other projects of yours?
The one thing I fund with profits from my ven-
tures is the Open Planning Project. That does
a number of things: build open-source soft-
WE HAVE A NICHE. FOR TRADERS
WHO ARE VERY SERIOUS ABOUT FAST
CONNECTIVITY, WERE BETTER.
Reprinted with permission from Trader Monthly, June/July 2008. On the web at www.traderdaily.com.
DOUBLEDOWN MEDIA. All Rights Reserved. FosteReprints: 866-879-9144, www.marketingreprints.com.
For more information about jobs at Tower Research Capital,
please email jobs@tower-research.com
For more information about Lime Brokerages products
and services, please email sales@limebrokerage.com