Knight not likely to shed major business units, CEO says

Fri Sep 21, 2012 2:54pm EDT
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By John McCrank

WASHINGTON (Reuters) - Knight Capital Group (KCG.N: Quote) is not likely to shed any of its major business units after the August 1 trading glitch that cost the market maker $440 million, forcing it to take on additional investors to avoid bankruptcy, Chief Executive Thomas Joyce said on Friday.

Volume levels at Knight, one of the top executors of U.S. stock trades, have returned to normal and now management and the firm's reconfigured board are conducting a strategic review of Knight's business units, Joyce said last week.

Speaking with reporters on Friday, Joyce said the thrust of the review is to look for efficiencies.

"An error was made on August 1, but we didn't really alter our view that we kind of like our footprint. The businesses that we are in, I think are doing well, and at this point we have every intention of building on that success," he said on the sidelines of a conference held by the Security Traders Association.

Aside from being a major market maker, matching equity orders from buyers and sellers and providing liquidity by stepping into the market themselves, Knight also runs bond and foreign exchange trading platforms and owns a reverse mortgage lender.

A group of investors, including Blackstone Group (BX.N: Quote), Getco and financial services companies TD Ameritrade AMTD.N, Stifel Nicolas (SF.N: Quote), Jefferies Group Inc JEF.N and Stephens Inc rescued the embattled market maker in a $400 million deal that kept it in business.

As part of the deal, TD Ameritrade, Blackstone, and Getco investor General Atlantic were given seats on Knight's board.

Joyce said the reconfigured board has had just one meeting so far, but that the new directors were very active.   Continued...

Barclays Capital specialists work at the post that trades Knight Capital on the floor of the New York Stock Exchange, August 6, 2012. REUTERS/Brendan McDermid