Market Structure Roundtable
June 2, 2010
Panel One — Market Structure Performance and Price Volatility
Ian Domowitz, Managing Director, Investment Technology Group
Ian Domowitz is a Managing Director at Investment Technology Group, Inc., responsible for analytical and network products, and a member of the company's Management and Executive Committees. Prior to joining the company in 2001, he served as the Mary Jean and Frank P. Smeal Professor of Finance at Pennsylvania State University and previously was the Household International Research Professor of Economics at Northwestern University. A former member of the NASD's Bond Market Transparency Committee, he also served as chair of the Economic Advisory Board of the NASD. Mr. Domowitz has held positions with Northwestern's Kellogg Graduate School of Management, Columbia University, the Commodity Futures Trading Commission, the International Monetary Fund and the World Bank. He is currently a Fellow of the Program in the Law and Economics of Capital Markets at Columbia University.
Christopher Nagy, Managing Director-Order Routing Sales and Strategy, TD Ameritrade
Christopher “Chris” Nagy is the managing director of order routing, sales and strategy at TD AMERITRADE. His responsibilities include developing and implementing Best Execution and routing strategy for TD AMERITRADE, as well as developing and enhancing market center relationships for the firms’ NASDAQ, Listed and Options business lines. Nagy is also a registered lobbyist for the firm and co-heads its government relations efforts.
Nagy joined TD AMERITRADE in 1999 as a trading manager. In September 2000 he was promoted to senior manager of trading, and from November 2001 to March 2005 he held the position of director of trading. Prior to joining the company, he held various positions within the securities industry. He began his career as a sales assistant with Shearson Lehman Brothers and more recently served eight years with US Bancorp as vice president of manager equity.
Nagy is a regular commentator on various financial and news outlets regarding securities market-structure. He serves on a multitude of industry committees including the NASDAQ Quality of Markets Committee (QMC), the Security Traders Association Trading Issues Committee, the Options Industry Council (OIC) Roundtable, and was Chairman of the SIFMA Options Committee from 2005 -2007. He also served on the Board of the Philadelphia Stock Exchange as the off-floor Vice Chairman from 2000-2004. He completed the Securities Industry Institute Wharton program in 2009.
Joseph Ratterman, President & Chief Executive Officer, BATS Exchange
Joe Ratterman is president and chief executive officer of BATS Exchange. Mr. Ratterman joined BATS as a founding employee and served as executive vice president and chief operating officer from 2005 to mid-2007. He is also president and chief executive officer of BATS Global Markets, the holding company for BATS Exchange and BATS Europe.
Prior to joining BATS, Mr. Ratterman was vice president of business development at Tradebot Systems. Previously, he was chief information officer at LabOne, the Lenexa, Kan.-based health screening and diagnostic testing company now owned by Quest Diagnostics.
Before being named an officer at LabOne, Mr. Ratterman was chief technology officer at Bridge Information Systems, where he was employed from 1990 to 2002.
An accomplished water skier, rock climber, track and distance runner, professional photographer and most recently a licensed, instrument-rated private pilot, Mr. Ratterman holds a degree in mathematics and computer science from Central Missouri State University, Warrensburg, Mo., as well as Series 7, 24, 27, 55 and 66 licenses.
Richard Rosenblatt, Chief Executive Officer, Rosenblatt Securities
Richard Rosenblatt is the CEO and founder of Rosenblatt Securities, an agency-only execution boutique founded in 1979. The firm executes equity trades for institutional investors through its trading desk and a team of professionals on the NYSE floor, where it is among the top executing brokers by volume.
Rosenblatt Securities has long championed automated trading, having pioneered direct access to the NYSE in the late 1980s. Today it offers similar access to electronic market centers and a host of sophisticated algorithmic tools for buy-side customers, as well as bespoke transaction-cost analysis that helps institutions maximize returns. The firm is also the leading independent provider of market-structure analysis and intelligence on the exchange industry through its Trading Talk newsletter and extensive custom work for clients. More recently, it has launched investment-banking services for companies in the exchange and financial-technology industries.
Mr. Rosenblatt is widely regarded as one of the foremost authorities on equity market structure. An NYSE Executive Floor Governor, he has served in various capacities as an official of the NYSE for more than 25 years. Mr. Rosenblatt is the Founder of the NYSE Floor Members Emergency Fund and the Founder and First President of the Organization of Independent Floor Brokers. He is also a Trustee Emeritus of Mercy College. In addition to his professional associations, Mr. Rosenblatt is active with several philanthropic organizations, serving as Founder and Chairman of the Floor Members Outreach Program, Founder and Director of the NYSE Fallen Heroes Fund, and Trustee of the NYSE Foundation.
Stephen Sachs, Director of Trading, Diamond Hill Investments
Steve Sachs is Director of Trading at Diamond Hill Capital Management where he oversees all of the firms trading activity. Mr. Sachs has nearly 20 years experience trading securities in the equity and derivatives markets. Prior to joining Diamond Hill, he spent seven years as Director of Trading for Rydex Investments in Rockville, MD where he oversaw all equity and derivatives trading as well as served on the firm's Executive Committee. Prior to that, Mr. Sachs held senior trading positions at Raymond James and Bank One.
Mr. Sachs holds a B.S. in finance from Franklin University in Columbus, Ohio and studied economics and international relations at The Ohio State University.
Timothy Sargent, Chief Executive Officer, Quantitative Services Group
Tim Sargent is the founder and Chief Executive Officer of the Quantitative Services Group LLC (QSG®). Prior to launching QSG, Tim developed and managed Donaldson, Lufkin & Jenrette's (DLJ) global quantitative research and trading activities, a group responsible for helping clients build stock selection models and sophisticated electronic trading strategies. Tim began his career as a portfolio manager at the Northern Trust Company, where he managed quantitatively-derived equity portfolios and derivative-based trading strategies. In the late 80's and early 90's, Tim helped to build the derivative research and trading businesses of Merrill Lynch and Salomon Brothers. He is a Chartered Financial Analyst (CFA) and a founding board member of the Chicago Quantitative Alliance.
Gus Sauter, Chief Investment Officer, Vanguard Group
George U. “Gus” Sauter is the chief investment officer of Vanguard. As chief
investment officer, he is responsible for the oversight of approximately $1 trillion
managed by Vanguard Fixed Income and Quantitative Equity Groups. The funds
managed by these two investment groups include active and passive stock funds,
bond funds, money market funds, and stable value funds.
Mr. Sauter is a member of the advisory board of the Journal of Investment
Management Conference Series, the Journal of Indexes Editorial Board, the
Investor Advisory Group of the Public Company Accounting Oversight Board,
and the Council on the Graduate School of Business of The University of Chicago.
He is a past member of the equity markets committee of the Investment Company Institute, the
Institutional Traders Advisory Committee of the New York Stock Exchange, and the Nasdaq Quality of
Markets Committee. He also has served on the trading committee of the Securities Industry Association,
Securities Industry and Financial Markets Association (SIFMA), and the AIMR Best Execution Task Force.
Mr. Sauter joined Vanguard in 1987. Previously, he was a trust investment officer with First Bancorp of Ohio (formerly The First National Bank of Ohio).
He earned an A.B. in economics from Dartmouth College and an M.B.A. in finance from The University
Panel Two — High Frequency Trading
Sal Arnuk, Partner and Co-Founder, Themis Trading
Sal Arnuk is partner, co-founder and co-head of equity trading of Themis Trading LLC. Mr. Arnuk has extensive experience in equities trading and is an expert in electronic trading and market structure.
Prior to Themis, Mr. Arnuk established an equity agency trading business (OTC and Listed equities) at Smith Jacobs & Company in 2000. Prior to Smith Jacobs, Mr. Arnuk worked for more than 10 years at Instinet Corporation, where he headed the team responsible for equity sales and trading for major institutional money managers. He has provided expert commentary for media outlets such as the Associated Press, BBC Radio, Bloomberg Television, BNN, CNBC, Fox Business, Barron's, The New York Times, The Wall Street Journal, USA Today, Time, Los Angeles Times, Bloomberg News, Pensions & Investments and Advanced Trading.
Mr. Arnuk graduated from New York University's Stern School of Business with an MBA in Finance and received a Bachelor's Degree in Finance from SUNY Binghamton University.
Kevin Cronin, Director of Global Equity Trading, Invesco
Kevin Cronin is the Global Head of Equity Trading and is responsible for trading desks in Asia Pacific, Europe and the Americas. Kevin joined Invesco in 1997 as the Head of Listed Equity Trading for Invesco Aim and later became Director of Equity Trading. In January 2007 Invesco named Kevin the Global Head of Equity Trading. Before joining Invesco, Kevin was Director of Equity Trading for First Union Capital Management in Charlotte and served as the lead fund manager of the Evergreen Enhanced Equity Fund.
Kevin holds the Chartered Financial Analyst certification. He is Chairman of the ICI’s Equity Markets Committee and serves as a member of the Georgia Securities Association, the Houston and Atlanta Societies of Financial Analysts and is the former Chairman of the NYSE Institutional Traders Advisory Committee. Kevin received a Bachelor of Arts in Psychology and Economics from Indiana University and a Master of Business Administration from Vanderbilt University.
David Cushing, Director of Global Equity Trading, Wellington Management Company
Dave serves as director of Global Equity Trading and of Execution Services, a group within Global Trading that encompasses both trading business management and transaction research across capital markets. Dave's trading team executes cash, program, and derivative orders in equity securities from issuers around the world.
Prior to joining Wellington Management in 2006, Dave worked at Lehman Brothers as managing director in charge of their US client-facing equity analytics and trading algorithms group (2004 - 2006). From 2000 - 2004, Dave was a co-founder and managing principal of Inference Group LLC, a quantitative investment management company based in Waltham, MA. From 1991 - 2000, he worked at ITG Inc. in New York, where he created and managed ITG's transaction research and trading strategy groups. Dave also served on the Management Committee at ITG. Between 1986 and 1991, Dave worked in the Equity Arbitrage Group at Lehman Brothers, where he began his work in trading analysis, program trading, and derivatives structuring, valuation, and hedging.
Dave received his AB in biochemistry from Brown University (1984). He also holds the Chartered Financial Analyst designation.
Michael Goldstein, Faculty Director, Stephen Cutler Center of Investment and Finance; Professor of Finance, Babson College
Michael A. Goldstein is a Professor of Finance at Babson College, where he holds the Natalie Taylor Senior Term Chair, and is Faculty Director of the Stephen Cutler Center of Investment and Finance. He is also an Honorary Professor at The Queen's University of Belfast (UK) and was a Visiting Professor at Trinity College (Ireland) in 2009. He has also taught at Boston College and at the University of Colorado at Boulder, where he received the Proctor & Gamble Teaching Excellence Award. Dr. Goldstein received a B.S., an M.B.A., an M.A., and a Ph.D. in Finance from the Wharton School at the University of Pennsylvania.
Dr. Goldstein's research specialty is examining the structure of markets, and his papers have been published in major finance academic journals, including The Journal of Finance, The Journal of Financial Economics, The Review of Financial Studies, The Journal of Financial and Quantitative Analysis, The Journal of Financial Markets, The Financial Review and Real Estate Economics. He is currently serves on the Board of Directors of the Eastern Finance Association and is an Associate Editor for The Financial Review. His work has been awarded the Best Paper in Derivatives/Market Microstructure at the 2007 Eastern Finance Association Meetings and has twice been awarded the Best Paper in Market Microstructure at the 2000 and 2006 Financial Management Association meetings. He is a Principal Investigator on a $400,000 National Science Foundation grant studying the effect of seasonality on the Arctic economy.
Dr. Goldstein currently serves on the Financial Industry Regulatory Authority (FINRA) Economic Advisory Board. He previously served on the Nasdaq Economic Advisory Board from 2003 to 2005, and was elected Chair for 2005. In December 2000, he served as a member of a SEC Roundtable on Decimalization. From August 1997 to July 1998, Dr. Goldstein was the Visiting Economist at the New York Stock Exchange. Prior to that, he advised the Deputy Prime Minister of Poland on Poland's privatization program. He also worked as an Investment Banker with Merrill Lynch Capital Markets in their Financial Institutions and Japan Banking groups.
Mark Grier, Vice Chairman, Prudential Financial
Mark B. Grier, a member of Prudential Financial’s Office of the Chairman and of its board of directors, oversees Finance, Risk Management, Investor Relations, Operations and Systems, Auditing, External Affairs, and Global Marketing and Communications. In addition, Grier leads Global Strategic
Initiatives, which focuses on priorities such as Prudential’s international retirement and China strategies.
Grier joined Prudential as Chief Financial Officer (CFO) in May 1995, with responsibility for oversight of treasury, comptrollership, tax and business line CFO functions. In 2002, he was named Vice Chairman, with responsibility for Financial Management, a department consisting of Investor Relations, Finance, Corporate Actuarial, Asset Liability and Risk Management, and External Affairs.
Before joining Prudential, Grier was co-head of Chase Global Markets and an Executive Vice President
of The Chase Manhattan Bank, N.A. In 1987, he was named Individual Banking Financial Management
executive for The Chase Manhattan Corporation’s Retail Banking businesses. He was also previously
responsible for Chase’s Business Policy, Asset Management and Financial Control and Analysis
In 1983, Grier served as senior vice president of Lincoln First Bank, N. A., a forerunner of Chase
Lincoln First Bank, N.A. He also served as Global Risk Management executive and treasurer of the
bank and its parent company, Lincoln First Banks, Inc. In 1981, Grier assumed the position of
economic and financial policy manager for the bank. He continued in these positions after The Chase
Manhattan Corporation acquired Lincoln First in July 1984. Grier began his career at Lincoln First in
1978 as an economic analyst.
Grier was born in Albuquerque, New Mexico. He attended Eastern Illinois University where he received a B.A. and an M.A. in economics. Grier also earned an M.B.A. in finance and corporate accounting from The University of Rochester.
Stephen Schuler, Chief Executive Officer, GETCO
Stephen Schuler and Dan Tierney founded GETCO in 1999 with a
common vision that the emergence of electronic trading would
transform the capital markets.
Today, GETCO is a global electronic trading and technology firm
focused on helping investors efficiently transfer risk. The firm's
primary business, electronic market making and liquidity provision,
involves both buying and selling securities to provide two-sided
markets on exchanges around the world.
Stephen has over 25 years of experience in trading and capital
markets and is a well recognized leader in the financial industry. Prior
to founding GETCO, he was head of the Schuler Group, a brokerage
firm focused on floor execution services, broker-assisted trading and
electronic trading systems.
Stephen began his career as a runner on the floor of the Chicago
Mercantile Exchange (CME). In 1984, he became a member of the
CME and began trading financial futures.
In addition to his role at GETCO, Stephen dedicates a significant
amount of his time to philanthropic efforts. Stephen and his wife,
Mary Jo, co-founded the Good Heart, Work Smart Foundation in
2006, which contributes to charities such as Aspire of Illinois and the
Special Olympics. After Hurricane Katrina, Stephen helped set up a
GETCO matching fund that raised over $66,000 for a women's
hospital in New Orleans.
Jeffrey Wecker, President & Chief Executive Officer, Lime Brokerage
Jeff Wecker joined Lime Brokerage as President and CEO in December, 2008. Prior to joining Lime, Jeff was the CEO of Townsend Analytics Inc., a subsidiary of Lehman Brothers Inc. Jeff negotiated the acquisition of Townsend while serving as Managing Director and Global Head of Electronic Trading at Lehman, a business that he created for Lehman. While at Lehman, Jeff also served on Lehman's firm-wide Investment Committee, the Prime Brokerage executive committee, and the board of directors of Archipelago Exchange prior to its sale to NYSE Euronext.
Prior to Lehman, Jeff was a co-founder of the Caspian group of companies where he launched and served as CEO of Caspian Asset Management. Jeff started his career at Goldman Sachs, heading teams in global derivatives and quantitative strategies. Jeff received degrees in Civil Engineering and Applied Mathematics from Princeton University.
Panel Three — Undisplayed Liquidity
Lawrence Leibowitz, Chief Operating Officer, NYSE Euronext
Lawrence Leibowitz is Chief Operating Officer of NYSE Euronext. He is also a member of the NYSE Euronext Management Committee, reporting to Duncan Niederauer, Chief Executive Officer and a Director of NYSE Euronext. Mr. Leibowitz, 49, is also responsible for NYSE Euronext’s Global Cash Execution and Listings businesses.
Prior to his current position, Mr. Leibowitz served as Head of U.S. Execution and Global Technology. In this role, he oversaw U.S. cash market listings and execution, as well as integrating technology platforms across the firm.
Prior to joining NYSE Euronext in 2007, Mr. Leibowitz was most recently with UBS Americas Equities where he served as Chief Operating Officer. He joined UBS Americas Equities as a Managing Director in 2004 when the firm acquired Schwab Capital Markets. He was responsible for several areas including Market Structure, Strategic Planning, Business Analysis, Regulatory Control, and the Broker Services Functions for the Equities Division. At Schwab, he was Co-Head of Schwab Capital Markets.
Before joining Schwab in October 2001, Mr. Leibowitz co-founded Bunker Capital, a quantitative hedge fund, in 1996. He also served as CEO of REDIBook ECN and as Managing Director and Head of Program and Quantitative Trading at Credit Suisse First Boston.
In addition to chairing the Nasdaq Quality of Market Committee and serving on the Securities Industry and Financial Markets Association’s (SIFMA) Market Structure Committee, Mr. Leibowitz has been a featured speaker at numerous industry forums related to market structure issues.
Mr. Leibowitz graduated from Princeton University with a degree in Economics.
Dan Mathisson, Managing Director & Head of Advanced Execution Services, Credit Suisse Securities
Mr. Mathisson is a Managing Director at Credit Suisse, where he is the Head of Advanced Execution Services (AES), the global market share leader in electronic trading. AES provides algorithmic strategies, tools, and analytics for trading equities, options, foreign exchange, and futures throughout the world. Mr. Mathisson founded the AES group shortly after joining Credit Suisse in 2000. Prior to that, he was the head equity trader at D.E. Shaw Securities.
Mr. Mathisson writes a column about trading and markets for Traders Magazine, and he is on the Board of Directors for the BATS Exchange. He holds a degree in Economics from the University of Michigan, and he is a Chartered Financial Analyst. In October of 2009, he testified in front of the Senate Banking Committee on high frequency trading and dark pools. In 2008, Mr. Mathisson was named #6 on Institutional Investor's list of the 40 most influential people in trading.
Seth Merrin, President & Chief Executive Officer, Liquidnet
Seth Merrin is the founder and CEO of Liquidnet Holdings and has held these positions since the company's beginning in November 1999. Liquidnet now serves as the world's institutional marketplace and facilitates institutional equities trading for more than 590 buy-side trading firms.
Prior to Liquidnet, Seth co-founded VIE Systems, Inc., a financial services application integration software company, in 1997. In 1985, Seth founded his first company, Merrin Financial, launching the industry's first order management, compliance and electronic order routing systems for asset managers, which was then sold to ADP in 1996.
Seth was named 2008 Ernst & Young's "Entrepreneur of the Year — Metro New York in Financial Services," and ranked 7th among Institutional Investor magazine's 2008 Online Finance 40.
William O'Brien, Chief Executive Officer, Direct Edge
William O'Brien joined Direct Edge as Chief Executive Officer in July 2007. As CEO, he is responsible for the management of all strategic, operational and administrative affairs of the company.
Prior to his appointment to Direct Edge, Mr. O'Brien was Senior Vice President, New Listings at The Nasdaq Stock Market, Inc. with responsibility for all Nasdaq efforts to increase U.S. listings, including IPOs, exchange transfers and structured products. He also was Nasdaq's Senior Vice President, Market Data Distribution, responsible for the sales, management and business direction of Nasdaq's real-time and historical market data business.
Mr. O'Brien joined Nasdaq in 2004 by way of Brut, LLC, where he had been Chief Operating Officer since 2002, helping lead the company through a period of significant growth and its acquisition by Nasdaq. He originally joined Brut as Senior Vice President and General Counsel in 2000. Mr. O'Brien also was Vice President and Assistant General Counsel at Goldman Sachs from 1998 to 2000 and was an attorney in Orrick, Herrington & Sutcliffe LLP's Market Regulation Group from 1995 to 1998. He has a B.A. from the University of Notre Dame and a J.D. from the University of Pennsylvania School of Law.
Mark Ready, Professor of Finance, Investment and Banking, Wisconsin School of Business
Professor Mark Ready is the Jeffrey J. Diermeier Chair of Finance and the Academic Director of the Stephen L. Hawk Center for Applied Security Analysis. He came to the University of Wisconsin in 1990 after completing his Ph.D. at Cornell University. Prior to obtaining his Ph.D., he spent seven years in various finance positions at Ford Motor Company.
Mark's research focus is in investments, with a primary focus on the functioning of financial markets. He has also published studies examining risk and return of a variety of trading strategies, ranging from technical trading rules for timing market returns to strategies that select individual stocks based on various fundamental measures. He has served as associate editor for both the Review of Financial Studies and Financial Management.
Mark served on the NASDAQ's Economic Advisory Board from 1998-2000, and he was the Chief Economist and Director of the Office of Economic Analysis at the U.S. Securities and Exchange Commission from April 2000 through January 2001.
Andrew Silverman, Managing Director & Global Co-Head, Morgan Stanley Electronic Trading
Andrew Silverman is managing director and co-head of Morgan Stanley Electronic Trading (MSET), and has over 27 years of experience in cash and electronic trading. Prior to joining Morgan Stanley, Andrew spent 14 years at Goldman Sachs, where he held roles in cash trading before becoming head of algorithmic trading. Andrew began his career at Lehman Brothers where he spent 10 years.