As reported by various news outlets on Friday, KCG, the firm that was created last year via a “take-under” of former Knight Capital by HFT market-maker Getco Securities after Knight suffered a $460 million trading loss attributed to a technology snafu, and whose business model somehow continues to pass the smell test by combining proprietary trading with “agency-only” execution of institutional orders that are directed to the firm courtesy of payment-for-order flow schemes, is suffering from more executive departures.
In a news release issued by the company, which was once considered to be a leading market-maker in ETFs, it was announced that Steven Bisgay, the firm’s CFO Richard Herr had left the firm. Two other senior executives have also apparently left during recent days, including Richard Herr, the firm’s head of corporate strategy and Andy Greenstein, the firm’s deputy general counsel. All three of these senior executives had come from Knight Capital when the 2 firms were combined in a $1.6 billion transaction.
According to one industry source, who is not authorized to speak on behalf of his firm stated, “The combination of the two cultures, one that is essentially an opportunistic trading shop and the other, which has been trying to justify its role as both a fiduciary broker and a prop trader is no doubt creating internal dysfunction.”