Knight Capital Group is looking for a new chief technology officer and operational and technology risk manager in a management shake-up at the firm which sustained $440 million in losses following a rogue trading software update.
Knight was rescued from bankruptcy by a cabal of six Wall Street firms who paid $400 million in August to keep the company afloat.
The meltdown came when a bungled software update affected its algorithms and sent prices in more than 140 stocks haywire, costing the market maker $440 million.
The man in charge of the Knight's technology operations at the time, Steven Sadoff, has now been moved aside to concentrate on building the firm's correspondent clearing, prime brokerage and futures businesses.
The shake-up at the top sees EVP and CFO Steven Bisgay take on added responsibility as chief operating officer, with overarching responsibility for all financial and operational aspects of the firm, including accounting, finance, treasury, risk management, operations, technology, human resources, business development and investor relations.
Tom Joyce, chairman and chief executive officer, says. "After careful consideration, we concluded it was best to consolidate responsibility for all financial, operational and technology risk under a single executive."
Managing director Brian Strauss has also been promoted in the reshuffle to the newly-created position of chief risk officer with global responsibility for credit, market and operational risk management. Strauss had previously served as chief credit officer.
As part of a continuing review of technology operations, Knight says it has initiated an internal and external search for a new CTO to report to Bisgay. Managing director Michael Tobin, a 12-year veteran of Knight, will serve as interim CTO until the position is filled. Knight has also begun an external search for an operational and technology risk manager to report to Strauss.
A recent study into high-frequency trading post-Knight by the Chicago Federal Reserve found that algorithmic malfunctions were not uncommon on Wall Street as brokers sacrificed careful testing of code in the race to get new trading strategies on the market as fast as possible. In some case, this involved tweaking old code and placing it into production in a matter of minutes.