Knight to Unite Institutional Sales Teams
Traders Magazine Online News, January 24, 2013
Knight Capital Group said it will consolidate its full service and electronic institutional equities sales teams, as it reported a drop in profit but gains in equities trading volumes.
The market making and electronic trading firm said it also will discontinue its correspondent clearing business.
The moves come as Knight attempts to merge with fellow market maker GETCO, a move initiated when Knight lost $456.6 million in a flood of erroneous orders placed on national markets due to a software mishap.
Knight, in announcing its fourth quarter 2012 earnings, said it was taking another charge, due to that near-death debacle. The firm’s Corporate operations recorded $7.7 million in professional fees associated with the announced merger and the August 1st technology problem.
For the fourth quarter, Knight reported consolidated earnings of $6.5 million, or $0.01 per share. That is down radically from $40.2 million, or $0.43 per share a year ago.
The new institutional equities sales operation will combine staff from Knight’s existing Institutional Sales and Trading and Electronic Execution Services teams.
The consolidated effort will be led by Head of Institutional Equities Joseph Mazzella and Head of International Albert Maasland.
As part of the change, Head of Electronic Execution Services David Lehmann will leave.
"In David's 10 years at Knight, he made numerous meaningful contributions to our growth. We thank him for his advice and guidance over the years and wish him all the best as he moves forward," said chief executive Thomas Joyce, in a formal statement.
The company also reported gains in most aspects of its market making business:
- Average daily U.S. equities market making volume traded in December 2012 was $21.3 billion, up approximately 3.3% from $20.6 billion in November 2012 and up approximately 13.7% from $18.8 billion in December 2011.
- Average daily U.S. equities market making trade volume in December 2012 was 2.8 million, down approximately 1.4% from 2.8 million in November 2012, and down approximately 5.7% from 3.0 million in December 2011.
- Average daily U.S. equities market making share volume in December 2012 was 3.1 billion, up approximately 12.7% from 2.8 billion in November 2012, and up approximately 14.2% from 2.7 billion in December 2011.
Its Knight Direct business recorded average daily equities share volume in December 2012 of 237.5 million, up approximately 7.1% from 221.8 million in November 2012, and up approximately 16.6% from 203.7 million in December 2011.
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