E*Trade Financial Corp. said Chief Financial Officer Matthew
Audette is leaving the company to take the same role at brokerage
firm LPL Financial Holdings Inc.
New York-based E*Trade said its chief risk officer, Michael
Pizzi, would take over the finance department at the company June
15.
The move comes as E*Trade's stock has gained, following years of
restructuring after the financial crisis. Its stock is up about 45%
in the past 12 months, buoyed by regulators' recent approval of its
capital plan and shareholder optimism that an increase in interest
rates, expected later this year, will help the company's
earnings.
Mr. Pizzi, who is 40 years old, said he would focus on what to
do with the $258 million in cash that the company had accumulated
as of March 31.
"Capital deployment is number one top of mind," he said.
E*Trade's management is contemplating stock buybacks, dividends and
capital investments, but hasn't yet tipped its hand on how it will
use the money.
Mr. Audette has been CFO since the beginning of 2011. He will
become CFO of LPL Financial on Sept. 28. The firm, one of the
largest independent broker-dealers in the country, has offices in
Boston, Charlotte, N.C., and San Diego, where Mr. Audette will be
stationed.
"If there was a time to go to another company, now would be the
time," said Mr. Audette, who turned 41 last Friday.
In recent quarters, E*Trade has steadily paid down debt,
reducing its borrowings by almost $800 million to $1 billion.
E*Trade also announced earlier this year it will move its
broker-dealer business out from underneath E*Trade Bank, where it
has operated since the financial crisis, under additional
regulatory scrutiny.
Among the issues facing Mr. Pizzi is an ongoing inquiry by the
Financial Industry Regulatory Authority into E*Trade's trading and
execution practices. The company received a Wells Notice from Finra
in March and said it continues to cooperate fully.
Mr. Audette said his departure had nothing to do with the notice
and he added that he felt comfortable with E*Trade's financial
situation.
Mr. Pizzi's risk officer role will be filled on an interim basis
by Paul Brandow, a senior adviser to the company. E*Trade is
looking for a permanent replacement.
A company spokesman declined to comment further on the
regulatory action.
LPL has had its own regulatory struggles, which made it crucial
that it hire a chief financial officer with experience in steering
a company through tougher times, says LPL Chief Executive Mark
Casady.
M. Audette "has seen the best of times and the worst of times as
a CFO," Mr. Casady said, "and that makes him incredibly valuable to
a company like LPL."
LPL paid $11.7 million in May to settle charges with Finra that
the firm failed to properly supervise complex products. For all of
last year, LPL spent $36.3 million on regulatory charges.
Mr. Casady says those levies were related to legacy issues that
are in the process of being resolved through investments in
technology and the hiring of additional compliance personnel. Now,
the firm is in the process of shifting its attention toward
growth.
Mr. Audette rounds out a management shuffle at LPL, replacing
Dan Arnold, who was named president in March. Mr. Arnold succeeded
former President Robert Moore, who resigned to join institutional
money manager Legal & General Investment Management America as
its CEO.
LPL has more than 14,000 independent advisers managing $485.4
billion in client assets.
Write to Vipal Monga at vipal.monga@wsj.com
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