Knight Says Lhota to Step Down After Sale of Debt Unit
Knight Capital Group Inc. (KCG) said Alan Lhota, co-head of the market maker’s institutional fixed-income business, will leave the company once the unit’s sale to brokerage Stifel Financial Corp. (SF) closes.
Knight expects to incur pretax charges of between $27 million and $33 million to cover severance costs, asset writedowns and contract termination fees related to the deal, the firm also said in a regulatory filing today.
The Jersey City, New Jersey-based company agreed on March 14 to sell the institutional fixed-income sales and trading business to Stifel for an undisclosed amount. The deal is set to close in the second quarter, Knight said in the filing with the U.S. Securities and Exchange Commission.
Knight was among firms that bolstered its debt unit in 2009 following the worst financial crisis since the Great Depression, hiring Lhota as head of high-yield, distressed and bank loan sales. Earlier, he headed junk-bond teams at RBS Greenwich Capital Markets and UBS AG.
The debt group at Knight covers high-yield and investment- grade corporate bonds, asset-backed and mortgage-backed securities, emerging markets and fixed-income research.
Knight agreed in December to be purchased by Getco LLC in a $1.4 billion deal, ending its 17 years of independence. Getco was among six financial firms that bailed out Knight in August, after trading glitches caused more than $450 million in losses and brought the company to the brink of bankruptcy.
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