By Jacob Bunge
Getco LLC has shed about 40 employees globally and several top
officials have left the electronic trading firm as it restructures
in response to sluggish financial markets.
David Babulak, an 11-year veteran of the firm who oversaw
strategy, and Edward Boyle, a former NYSE Euronext (NYX) executive
who managed Getco's relationships with exchanges, have departed
from the firm in recent weeks.
A spokeswoman for Getco confirmed the departures but declined
further comment.
Getco, among the best-known high-frequency market makers, joins
a roster of exchanges, brokerages and other financial firms pushing
to streamline as trading activity and volatility have tapered off,
pressuring companies that make their money from the buying and
selling of stocks and derivatives.
Getco's main business lies in making markets, quoting prices to
buy and sell securities, and pocketing the difference, or spread.
The Chicago-based firm relies on sophisticated technology to detect
market shifts and re-peg its prices.
The restructuring follows the late February appointment of
Daniel Coleman, a former UBS AG (UBS) executive, as chief executive
at Getco. Mr. Coleman took over leadership of the firm from
co-founders Stephen Schuler and Dan Tierney and has continued a
strategic revamp of the company, which has placed a new emphasis on
selling its trading tools and technology to other investors, like
mutual funds.
Details of the restructuring were reported earlier by Crain's
Chicago Business. Last week, Dow Jones Newswires reported the
departure of Michael Rauchman, formerly Getco's chief technology
officer, who had worked for Getco since 2001 and previously oversaw
its equity and currency trading operations.
Mr. Babulak retired from Getco in May, while Mr. Boyle's
position was eliminated as part of the restructuring, according to
a person familiar with the matter.
A raft of senior executives have left positions with exchanges
and big trading firms in recent weeks. Last month, NYSE Euronext
disclosed the planned departures of Garry Jones, its global head of
derivatives, and Stanley Young, the head of its technology
business.
On Wednesday, CME Group Inc. (CME) confirmed that Roger
Rutherford, head of the futures-exchange operator's
foreign-exchange products division, would leave the company. Both
CME and NYSE Euronext have undertaken efforts to reduce costs in
recent months.
The restructuring at Getco follows similar moves undertaken last
summer at other firms focused on trading, including Knight Capital
Group Inc. (KCG) and Investment Technology Group Inc. (ITG).
Trading activity in both stocks and derivatives has fallen this
year as volatility has declined across many markets. In U.S.
stocks, the level of daily turnover earlier this year hit its
lowest level since 2007, while trading in derivatives linked to key
interest rates and stock indexes has also dipped.
Money has flowed out of mutual funds, while trading operations
face growing expenses stemming from new regulations such as the
Dodd-Frank financial law.
"It's a strange time," said Stephen Ehrlich, CEO of Lightspeed
Financial Inc., a brokerage firm that works with institutional and
retail investors. "People are looking at the volumes and trying to
be sure they can be successful."
Write to Jacob Bunge at jacob.bunge@dowjones.com.