Browne’s ETF-Trading Team Joins Cantor After Leaving KCG
Reggie Browne, who left KCG Holdings Inc. (KCG) last week as head of exchange-traded funds, has joined Cantor Fitzgerald LP, the trading firm led by Howard W. Lutnick.
Darren Taube, Eric Lichtenstein and “approximately 20” or more additional members of Browne’s former team at KCG will also come to New York-based Cantor in similar roles, Shawn Matthews, chief executive officer of Cantor Fitzgerald & Co., the investment-banking unit, said today in an interview. Cantor previously had a small presence in ETF trading, Matthews said.
“This represents a magnitude of change for us,” Matthews said. “ETFs continue to offer substantial growth on a global basis and give us the ability to match up with existing customers in a more significant way.”
Browne, 45, helped make KCG, formerly known as Knight Capital Group Inc., the biggest lead market maker for ETFs on the New York Stock Exchange, backing more than a third of the funds listed there. He has a reputation for supporting innovation in the industry, helping smaller providers reach the market with new products since joining Knight four years ago.
Cantor Fitzgerald marks the third stop for Browne, Taube and Lichtenstein as a team. The trio came to Knight from Newedge Group SA in June 2009, where they had been co-heads of ETF trading, bringing 10 colleagues with them.
Browne will report to Jarred Kessler, global head of equities at Cantor Fitzgerald & Co.
Browne said the move to a closely held firm carried advantages for his business because it may face fewer regulatory hurdles in putting its balance sheet behind trading operations.
“It being a private firm, in anticipation of regulation in the marketplace, has made Cantor a compelling choice for us,” he said today in an interview.
Browne, Taube and Lichtenstein were unable to come to terms on a renegotiated employment contract with KCG, two people familiar with the situation said earlier this month. The company said Sept. 4 it had ended its employment agreement with them, with the trio staying until Sept. 13 to ensure an “orderly transition.”
Knight agreed in December to be purchased by Chicago-based Getco LLC in a deal valued at $1.4 billion at the time, ending a four-month saga in which it almost went bankrupt. Closely held Getco LLC, founded in 1999, was among six financial firms that bailed out Knight Capital in August 2012, after a software malfunction caused more than $450 million in trading losses. Thomas Joyce, Knight’s founder and chief executive officer, left the firm after the merger.
Lutnick, chairman and CEO of closely held Cantor, has said he’s pushing to expand in capital markets and outside the U.S. as a decline in trading squeezes profit at brokerages. The firm hired a municipal-bond sales team in January after a previous foray into that market faltered and added seven corporate-debt brokers from Gleacher & Co. in May.
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