Investment Technology Group Inc. said Monday that it has
replaced Chief Executive Bob Gasser with board member and E*Trade
Financial Corp. veteran Jarrett Lilien, after disclosing a possible
dark-pools settlement with the Securities and Exchange Commission
last week.
"We are very pleased that Jarrett has agreed to serve as interim
CEO, while we consider our options for a permanent CEO," said
Maureen O'Hara, chairwoman of ITG's board. Mr. Lilien was chief
operating officer and president at E*Trade.
ITG said it also has accelerated its second-quarter earnings
report and expects to release the results after the market closes
on Monday.
Last week, ITG disclosed that it was planning to settle a major
dark-pool enforcement action with the SEC.
Dark pools are trading venues where investors buy and sell
shares anonymously and several are run by the largest financial
institutions. They have come under more intense regulatory scrutiny
in recent years with watchdogs accusing some of Wall Street's
largest firms of misleading clients or treating them unfairly.
The SEC investigated ITG for alleged violations of
customer-information controls and internal policies that took place
during a pilot program run by broker-dealer subsidiary AlterNet
Securities Inc. in 2010 and 2011, the firm said, as well as a lack
of client disclosures about the program.
Under a potential settlement negotiated with the staff of the
SEC's enforcement division, ITG would pay $20.3 million. This would
include a civil penalty of $18 million, disgorgement of about $2.1
million in trading revenue and prejudgment interest of about
$250,000.
ITG said Monday that the settlement is in progress and the
company concluded an independent review of the matter last
week.
"We hope to expeditiously finalize the settlement and to work
with our customers, shareholders and employees to restore
confidence in our company and its capabilities," Ms. O'Hara said in
a news release.
ITG gained 2.2% in morning trading to $20.80 a share.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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