Morning Coffee: Major Management Shakeup at Knight Capital
Knight Capital, which two months ago lost $440 million due to an embarrassing computer-trading glitch, has reassigned the head of its technology unit in a management shakeup that has the New Jersey firm searching for a new CTO and operational and technology risk manager.
Steven Sadoff, just two years removed from being ranked as one of the top chief information officers on Wall Street, will remain with Knight but will now focus on the market making firm’s clearing, prime brokerage and futures businesses.
As part of the move, Knight has added additional responsibilities to chief financial officer Steven Bisgay, who will now oversee all operational facets of the firm. Knight has also promoted managing director Brian Strauss to the newly created role of chief risk officer.
The moves aren’t all that surprising considering the magnitude of the software malfunction which caused Knight to inadvertently place a flood of equity trades that nearly bankrupted the firm, forcing Knight to reach out to other Wall Street firms for financial assistance. Knight’s board is now comprised of directors from Blackstone Group and General Atlantic, as well as TD Ameritrade CEO Fred Tomczyk.
The management shakeup ends a long and mostly successful run for Sadoff, who was lauded for his ability to bring automated trading to a never-before-seen level.
“Very much a bunch of humans smashing buttons,” Sadoff once said of Knight’s live trading process, according to Securities Technology Monitor. “Now, more than 99% of order flow is hands off.”
Knight’s trading blunder, among other, less destructive technology-based trading glitches, has lawmakers calling for tighter controls on automated trading tools.
Stephen Morse, a former top compliance executive at Barclays, is now the chief compliance officer at TD Bank Group. Morse, along with other Barclays’ compliance officials, was reportedly made aware of potential rate manipulation concerns back in 2008. Morse quietly joined TD Bank at the end of 2011, before the fallout from the Libor scandal claimed the jobs of several top execs at Barclays.
When applying for a graduate sales position at an investment bank, your CV should emphasize competitive and team-oriented extracurricular activities, including your involvement in social clubs and sports teams.
The managing director of loan sales at Goldman Sachs reportedly is set to leave the firm. Michael Pope, who has been with Goldman for more than a decade, joins a long list of managing directors to leave the bank as it seeks to trim payroll.
Better than a Pat on the Back (Reuters)
Morgan Stanley Smith Barney will award cash bonuses to thousands of support staff who helped integrate the firm’s new computer system.
Hamstrung by tighter recruiting budgets, several top ranked U.S. business schools are teaming up to host co-sponsored recruiting events, leading to an overall increase in attendance and applications.
Battle for Bonuses (Bloomberg)
Two former Investec bankers are suing the firm to recoup unpaid bonuses in excess of $10 million. An Investec spokesperson said the claims are without merit.
JP Morgan Cazenove is prepping a new investment trust that will donate 1% to cancer-related charities while charging no management or performance fees.
Buzz Around the Office
Apparently Google’s Street View mapping feature does more than inadvertently pilfer user data. It also captures some hilariously wrong personal habits in the act.
List of the Day: Getting Passed Over
Didn’t receive that promotion you thought you deserved? Here are a few reasons you may have come up short.
- You think like an employee, not a manager.
- You act like a promotion is due to you, rather than going out and earning it.
- You don’t take the initiative.