ITG

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ITG
ITG new logo.jpg
Founded 1987
Headquarters New York, NY
Key People Jarrett Lilien, Interim CEO; Pat Read, Director and Head of Derivatives
Products Investing and trading solutions
Website www.itg.com

ITG is a specialized agency brokerage and technology firm that partners with clients around the world to provide investing and trading solutions. ITG combines pre-trade analysis, order management, trade execution, and post-trade evaluation. The firm is headquartered in New York with offices in North America, Europe and the Asia Pacific regions, and has 15 offices in 9 countries.

It was formerly known as Investment Technology Group, Inc. [1]

ITG combines trading technologies, such as POSIT (the first anonymous electronic trade matching system)[2], ITG Algorithms, and Transaction Cost Analysis (TCA), with its expertise in financial markets. ITG also added pre- and post-trade analytics and multi-asset class order management to its product offering.[3]

In November of 2018 Virtu Financial Inc. said it was purchasing ITG for nearly $1 billion - about $30.30 a share. Shares of ITG had last closed at $27.75 a share. ITG shareholders still need to approve the deal.[4]

History

ITG launched POSIT in 1987.[5]

In August of 2015, ITG agreed to pay a $20 million fine to the Securities and Exchange Commission for violations at a secret proprietary trading desk it ran in 2010 and 2011. It was the SEC’s largest penalty against an alternative trading system.[6] The SEC charged the company with trading against ITG clients and misusing their confidential information. The chief executive at the time, Robert Gasser, resigned after the allegations. The stock price slumped to a low of $12.71 that September from close to $30 in the middle of 2015.

ITG appointed Jarrett Lilien, a member of the ITG board and the former president and chief operating officer of E*Trade Financial, as interim chief executive.[7]

Francis Troise, who joined from JPMorgan but had worked at ITG for eight years earlier in his career, eventually took over as CEO. Among the changes he made to revamp the company were exiting what he called periphery businesses: a research arm, Canadian arbitrage trading and securities lending.[8]

The SEC also investigated ITG policy violations by a former employee regarding access to private customer orders and trade executions. ITG said it had implemented tighter controls over employees with access to such customer data to increase transparency and control of information.[9]

Following the scandal, in the six months leading up to June 30, 2016, ITG had a loss of 23 cents a share and a revenue decline of more than 15 per cent to $245 million.[10]

Products and Services

In May of 2013, ITG launched a dark pool service in Singapore aimed at buy-side investors.[11]

In May of 2014, ITG said it was posting to its website the Form ATS, a normally private regulatory filing that explains how its Posit dark pool operates.[12]

On July 15, 2014, ITG announced the launch of the ITG FX Trading Cost Index Application, a new tool for foreign exchange traders and portfolio managers. Updated daily, the ITG FX Trading Cost Index estimates the average cost of liquidity for 20 common currency pairs. It also provides dealer and ECN calculations based on historical costs, adjusted for recent trends in cost levels and implied volatility.[13]

In June 2015 ITG rolled out a new algorithm called Dark List Algorithm that made dark pool liquidity available to portfolio traders.[14]

Key People

References

  1. ITG Press Release. ITG.
  2. The ITG Story. ITG.
  3. ITG Business Overview. ITG.
  4. Virtu Financial to Buy Brokerage ITG in Almost $1 Billion Deal. The Wall Street Journal.
  5. About ITG. ITG.
  6. ITG may pay record $20.3m penalty to SEC. The Financial Times.
  7. ITG Ousts CEO Gasser After Probe. The Wall Street Journal.
  8. Revamped ITG seeks return to growth. The Financial Times.
  9. ITG chief steps down amid SEC trading probe. The Financial Times.
  10. Revamped ITG seeks return to growth. The Financial Times.
  11. ITG launches its first 'dark pool' in Singapore. The Financial Times.
  12. ITG Joins Dark Pool Disclosure Debate With Push for Transparency. Bloomberg.
  13. ITG Launches FX Trading Cost Index Application. ITG press release via MarketWatch.
  14. ALGO UPDATE: ITG Launches Dark List Algorithm for Portfolio Traders in the U.S.. Traders Magazine.