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FBN’s Charlie Gasparino on Knight Capital’s contract negotiations with CEO Tom Joyce.
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Death experience of Knight capital may also spell the end of its chairman and CEO Tom Joyce -- man who presided over the trading here that.
Cobble together the bailout package that actually save the firm from liquidation.
As promised -- Stanley.
Yeah.
Pretty well at least -- -- -- Observation well after he blew up the end of the very well I mean here's what we do know that Tom Joyce -- CEO tonight.
Sources tell Fox Business Network is in contract negotiations with the board.
Over whether he will they will extend his contract into the following year what we do know is that his current deal.
Ends.
Excuse me ends in December.
The question is will they give him another deal.
And I'll tell you there's a lot of doubters out to the board is clearly weighing his role in the trading debacle that nearly -- the firm earlier this year I think it was it was in the summer.
Did did Tom Joyce as CEO.
Managed to firm right way where they actually had controls.
On on -- trading on some on -- under trading systems.
Which they obviously didn't how much of that is his responsibility that's with the board is -- right now the other thing to -- Is an SEC investigation into the hole and into the mess you know I don't think you know you throw someone out of -- business you know for -- screw up.
But clearly the SEC's concern about whether.
Night secure Knight capital actually had the right controls in place in there's a specific SEC rule that says you must have controls over and -- sort of computerized trading systems that you've that you use and that's what -- got in trouble here it was an -- trade.
It was gonna cost a firm hundreds of millions of dollars and basically bankrupted from before they got the capital infusion so that's where we are right now I would just say this I'm not saying he's gonna leave.
There is clearly it's it's more than a theoretical possibility that they don't extend his contract and this and Tom Tom -- -- out.
Well a lot needs to play out from what I understand the -- still weighing his role.
There's an internal investigation going on they've hired an outside consulting firm to do that -- SEC investigation.
And you clearly have a debate at the firm as to whether he should stay -- -- we should point out that a lot of people put money into night secured Knight capital.
You know defeat the they had a fairly large bailout package sex -- -- prices right now that's a pretty on the -- stock by the way.
Are among people money on -- the condition.
But Tom Joyce states because they think he's you know that at bottom a -- CEO.
But there's a lot of angry investors out there in order to.
Investors got crushed you know they didn't completely -- deal they get a convertible deal.
And a lot you wonder whether he should just sold an outright would investors have done better they -- that I write could they've gotten more than.
The current price which is less than three dollars a share so it's -- -- situations very Dicey but what we do what the box was never goes out.
Is that they're negotiating his contract there's clearly a question mark whether they -- extended and it ends in December.
Just to reiterate it's tough to know if Tom Joyce did anything specifically -- -- right I mean well.
At -- how how could this have been avoided well look -- look at look look at Jon Corzine.
The Jon Corzine do anything specifically wrong I mean.
Jon Corzine ran a firm which at.
The very least did not have the controls in place we wouldn't go dipping into customer funds.
When you run into liquidity crisis which is essentially what happened with MF global.
-- the creditors people into money start pulling the lines of credit Wall Street every Wall Street from depends.
On that as -- -- -- to keep the operations going and because he didn't have the controls in place was he wasn't good enough manager.
That's a problem and that's -- that's it that's -- -- that the -- care about and they care about this -- remember this was an errant trade.
Why didn't he have the sort of trip wires that prevented an Eritrean and -- -- -- -- trade went on not just for thirty seconds this thing went on for like you know half hour.
And it took the New York Stock Exchange to alert Knight capital that you have a problem and even when they alerted him.
They still couldn't get through people like us not this -- its act as they still couldn't really I'm so this is -- really messy from.
And yes the CEO of any major companies not everywhere but -- -- he can you can make make a case that the CEO did not do enough in terms of.
I you know the risk management and the sort of complaint systems the plumbing that needs to be in place that would prevent -- -- or at least.
Meet me you -- lessened the impact you know instead of right going -- -- half hour the quest going on for you know five minutes did he do enough that is the question like -- do that's what I'm looking at and that's blacks what's holding up the contract's fine lines.
