(Adds investor comments, updates share price, paragraphs 4-10)
Jan 10 (Reuters) - TMX Group Ltd, the operator of the Toronto Stock Exchange, announced that Chief Executive Officer Lou Eccleston will retire early, and said an internal investigation had found no evidence of sexual misconduct at the company after he had been accused of harassment before he joined in 2014.
Eccleston, whose contract was set to expire on Dec. 31, 2020 will retire, effective immediately, the company said reut.rs/2tKW1zV in a statement.
Chief Financial Officer John McKenzie was named interim CEO, as the company prepares to start a search for Eccleston’s successor that will include both internal and external candidates, TMX said.
“He was a good allocator of capital and a good steward of the company,” said Barry Schwartz, portfolio manager at Baskin Wealth Management. “If they can find someone who has experience on the analytical, software business side, that would be, in my mind, a very smart CEO acquisition.”
Schwartz hailed TMX's purchase of commodities trading platform Trayport Holdings in 2017 in particular as a "home run" for Eccleston, under whose stewardship since November 2014 the company's shares have doubled, vastly outperforming the Toronto Stock Exchange 300 Composite Index's 18% gain. [reut.rs/2NeQIj2 ]
TMX shares fell 0.9% in morning trade in Toronto on Friday, compared with little change in the Toronto stock benchmark.
Late last year, TMX said it was looking into allegations about inappropriate sexual conduct by Eccleston before he joined the company, which surfaced in a media report.
While TMX said it found no evidence that Eccleston engaged in sexual harassment or sexual misconduct while employed at TMX, Eccleston “believes it is in the best interests of TMX Group, including its employees and stakeholders, for him to retire early,” TMX said in the statement.
Eccleston's departure could put the TMX in play, Schwartz said. The company was a takeover target in 2011, but the London Stock Exchange's C$3.6 billion ($2.76 billion) bid was scuttled following strong opposition from Canada's biggest banks. [reut.rs/30aohby ]
“To me it makes perfect sense for TMX to eventually merge with Nasdaq to create a North American powerhouse for listings,” Schwartz said. ($1 = 1.3040 Canadian dollars) (Reporting by Nichola Saminather in Toronto and Bharath Manjesh in Bengaluru; Editing by Bernard Orr and David Gregorio)
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