Axiom agrees to buy out partners

Last week, two of the company's three founders, Nicholas Stephan and Wesley Wang, called for the New York State Supreme Court to dissolve the company. They claimed Cawley's impending return as chief executive had led most of Axiom's traders to resign, irreparably damaging the company (See: Axiom risks dissolution over dispute).

After a court hearing on Monday, the parties reached a deal under which Stephan and Wang would agree to withdraw their allegations and resign in exchange for having their shares bought back by Axiom.

Under the terms of the settlement, neither the parties involved nor their lawyers are permitted to discuss details of the buyback.

In a statement issued yesterday, Cawley said: "My priority is to stabilise the firm – retain our best people, strengthen systems and re-establish proper financial controls. There is much to be done, but with good people and the support of our clients we can rebuild the company."

The buyback should redress an imbalance of power between the shareholders and the board. Cawley, Stephan and Wang were three of the five members of the board: the others are John McCabe and John Park, both considered Cawley's allies. But each of the three founders owned 25.5% of the shares, according to documents filed by Stephan and Wang, meaning the dissidents were unable to run a company of which they together owned a 51% majority stake.

Axiom has not disclosed the amount the dissidents will receive in exchange for their shares. According to last week's court filing, Axiom has $850,000 in cash and $2.4 million in receivables, set against $1.6 million in liabilities and payables, but it will also have to use these reserves to hire replacements for the departed traders.

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