*State Street names new global markets chief
*Securities lending program has weathered turmoil
(Reuters) - The senior executive at State Street Corp who oversaw its securities lending business, which has weathered employee defections and a regulatory investigation, has left the company, the Boston-based custody bank confirmed on Wednesday.
David Puth decided to leave State Street after running its global markets business for three years, company spokeswoman Carolyn Cichon said. Puth is pursuing other opportunities in the financial services industry, Cichon said.
Mike Rogers, executive vice president and head of global services Americas, will assume leadership of the global markets business in addition to his current responsibilities. Rogers is a 30-year industry veteran who led Investor Financial’s capital markets businesses before it was acquired by State Street in 2007.
Puth did not return a telephone message seeking comment.
In August 2008, State Street named Puth to the newly created position of head of investment research, securities finance and trading activities worldwide. He also joined the company’s operating group, State Street’s senior-most strategy and policy-making team.
Puth previously worked at Chemical Bank, where he developed and managed the bank’s proprietary investments in a portfolio of hedge funds that later became part of JP Morgan Capital Partners. In 2007, before joining State Street, he founded Eriska Group, an investment adviser and risk management consulting firm.
In the summer of 2010, eight State Street executives left the company’s global securities finance team to start their own firm. And earlier this year, State Street said in its annual report that the U.S. Securities and Exchange Commission was investigating the management of the company’s securities lending program and the adequacy of disclosures to clients in regard to certain collateral pools.
Securities lending is a key source of revenue for State Street. In the third quarter, State Street’s average lendable assets were about $2.3 trillion.
The company said that third-quarter revenue from trading services, securities finance and foreign exchange increased 21 percent over the second quarter amid higher market volatility. Revenue from securities finance, which includes lending stocks to hedge funds for shorting, decreased about 38 percent to $85 million from the seasonally strong second quarter.