Knight not likely to shed major business units, CEO says

Sat Sep 22, 2012 12:14am IST

Stocks

   

* Joyce says strategic review underway looking for efficiencies

* Says new directors very active

* Supports idea of Direct Edge sale

By John McCrank

WASHINGTON, Sept 21 (Reuters) - Knight Capital Group is not likely to shed any of its major business units after the Aug. 1 trading glitch that cost the market maker $440 million, forcing it to take on additional investors to avoid bankruptcy, Chief Executive Thomas Joyce said on Friday.

Volume levels at Knight, one of the top executors of U.S. stock trades, have returned to normal and now management and the firm's reconfigured board are conducting a strategic review of Knight's business units, Joyce said last week.

Speaking with reporters on Friday, Joyce said the thrust of the review is to look for efficiencies.

"An error was made on August 1, but we didn't really alter our view that we kind of like our footprint. The businesses that we are in, I think are doing well, and at this point we have every intention of building on that success," he said on the sidelines of a conference held by the Security Traders Association.

Aside from being a major market maker, matching equity orders from buyers and sellers and providing liquidity by stepping into the market themselves, Knight also runs bond and foreign exchange trading platforms and owns a reverse mortgage lender.

A group of investors, including Blackstone Group, Getco and financial services companies TD Ameritrade, Stifel Nicolas, Jefferies Group Inc and Stephens Inc rescued the embattled market maker in a $400 million deal that kept it in business.

As part of the deal, TD Ameritrade, Blackstone, and Getco investor General Atlantic were given seats on Knight's board.

Joyce said the reconfigured board has had just one meeting so far, but that the new directors were very active.

"They have been very communicative and they understand the industry, so they have been very helpful in terms of industry issues," he said. "The other three new investors have been passive."

Knight also holds a stake of about 20 percent in Direct Edge, the No. 4 U.S. cash equities exchange. Reports have said in recent months that Direct Edge is looking for potential merger partners, and Joyce, who once sat on Direct Edge's board, said he supports the idea.

"There is a lot of logic if they find a bigger, global partner. It gives somebody internationally a chance to have a pretty big presence in the U.S., so I think it is a very attractive asset," he said.

Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage