Trading firm KCG says three managers to exit its ETF team
NEW YORK, Sept 4
NEW YORK, Sept 4 (Reuters) - KCG Holdings Inc, the trading firm formed in July through Getco Holding Co's $1.4 billion takeover of Knight Capital Group, said on Wednesday three managers were exiting its exchange-traded funds team.
The managers leaving are Reggie Browne, Eric Lichtenstein and Darren Taube, a company spokeswoman said. All three came from the Knight side of the business, and were unable to agree on terms of new contracts, a person familiar with the situation said.
KCG first disclosed the information in a regulatory filing that did not name the individuals.
Severance costs related to the layoffs, expected to be effective Sept. 13, 2013, will total $15 million, and will be recognized in the third quarter, the company said in the filing.
Joe Mazzella, and John Dibacco will be overseeing the ETF group on an interim basis, which KCG plans to further develop, the source said.
KCG is one of the biggest U.S. market makers in ETFs.
In August last year, a software problem at Knight led to millions of unintentional orders flooding into the market, leaving the firm with a huge position it had to unload at a loss of $461.1 million. Knight secured $400 million in rescue financing - in exchange for a more than 70 percent stake in the company - from a group of investors that included Chicago-based Getco and was led by Jefferies Group Inc. Jefferies later helped finance Getco's proposed acquisition of Knight.