GFI Group tumbles on staff defection worries

BANGALORE (Reuters) - GFI Group Inc (GFIG.O: Quote, Profile, Research) shares fell the most in a day since its IPO, after the Inter-dealer broker said its credit head resigned and warned more brokers could be leaving blaming "concerted" effort by a competitor.

The New York-based company did not mention the name of the competitor, but said its North American credit head Donald Fewer had resigned effective April 14.

"We will not comment on the name of the competitor," investor relations manager, Chris Ann Casaburri, told Reuters by phone.

"Fewer's departure was part of a concerted effort by one of its competitors to raid GFI's highly successful North American credit product brokerage business by hiring members of GFI's New York credit brokerage staff," the company said in a news release.

GFI said as many as 12 of its North American credit brokers, who accounted for about $50 million in revenue for 2007, may be in the process of defecting to the competitor.

GFI also said it expects its first quarter earnings to be 28 cents or more and its brokerage revenue to be 25 percent to 30 percent over the first quarter of 2007.

Analysts expect the company to earn 28 cents a share, according to Reuters Estimates.

Shares of the company fell as much as 28 percent earlier in the day, before recovering some of their losses to trade down 17 percent at $12.90 in afternoon trade on Nasdaq.

(Reporting by Sweta Singh; Editing by Dinesh Nair)