State Street Corp said on Saturday the top executive of its electronic foreign exchange trading business has left the company in a leadership shake-up.
The departure of Clifford Lewis raises questions about the direction of Boston-based State Street's high-frequency trading platform for forex called Currenex. Lewis was chief executive and chairman of Currenex when State Street agreed in 2007 to buy the company for nearly $600 million in cash.
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"Because we have combined teams and solutions that previously resided within other business units, we've had to make tough decisions about leadership, and Cliff Lewis left as a result of those decisions," said State Street spokeswoman Carolyn Cichon. "We are very grateful for the contributions he has made and strong management team that he leaves behind."
On Friday, State Street said Jeff Conway would oversee a global exchange group that included electronic FX trading, data analytics and derivatives clearing.
Lewis was not mentioned in the reorganization announcement. He did not return messages seeking comment.
Lewis was an executive vice president at State Street and head of the e-Exchange business, which includes Currenex, FXConnect and a range of other trading platforms. The e-Exchange FX businesses averaged over $150 billion in daily volume in 2012, making them one of the largest FX trading platforms in the world. Lewis also managed State Street's derivatives and bond clearing businesses.
Last year, though, State Street's revenue from electronic forex trading fell 16 percent to $210 million from $249 million in 2011, according to company financial statements. The company blamed declines in currency volatility and pricing. Total FX trading revenue at State Street fell 25 percent in 2012.
Part of the drop was related to a shift away from non-negotiated FX trades by State Street customers, such as state-run pension funds. On those trades, it has been alleged that State Street had been overcharging customers, an accusation the company has steadfastly denied.
Lewis' operations did not include non-negotiated trades. Instead, Currenex, for example, focused on sophisticated algorithmic trading, which uses computers to place orders that sometimes are executed within milliseconds.
These high-frequency FX trades are a big area for potential growth at banks. Computer-run algorithms allow hedge funds, for example, to unload large amounts of currencies without tipping their hand. They can also read and interpret news and economic data releases, generating trading orders before the rest of the forex market is fully aware of what is happening.
(Reporting By Tim McLaughlin; editing by Christopher Wilson and Gunna Dickson)