Despite a $400 million trading loss that nearly left the company insolvent in early August, Knight Capital Group, parent company of reverse mortgage lender Urban Financial, is unlikely to shed major business lines, the company’s CEO said Friday.
Speaking with reporters attending a Security Traders Association conference Friday, Knight CEO Tom Joyce said the businesses the company currently operates in should be here to stay, according to a report from Reuters.
“An error was made on August 1, but we didn’t really alter our view that we kind of like our footprint. The businesses that we are in, I think are doing well, and at this point we have every intention of building on that success,” Joyce said according to the Reuters report.
The company rebounded following the sudden loss through a joint-rescue from Wall Street peers and trading counterparts. Trading has since made a comeback after being halted immediately following the loss.
Knight’s board, too, has been restructured as a result of the buy in from those players including TD Ameritrade, Blackstone, and Getco investor General Atlantic.
Reuters reported on Joyce’s comments on the new board members and their work since the restructuring.
“They have been very communicative and they understand the industry, so they have been very helpful in terms of industry issues,” Joyce said in the report. “The other three new investors have been passive.”
Speculation has risen as to whether Knight would hold on to Urban Financial Group or sell off its business units in the wake of the trading glitch. Knight has commented publicly that it remains committed to it’s reverse mortgage business and that the company faced no interruption in funding loans or issuing Ginnie Mae securities in the wake of the loss.
Written by Elizabeth Ecker