Dave Cummings Steps Down As BATS CEO/Prez

By Kerry Massaro
Jun 29, 2007 at 02:14 PM ET

President and CEO of BATS, Dave Cummings sent this email to the BATS community about an hour ago:

Dear Trading Community,

Passing the Baton to Joe Ratterman
BATS Trading is pleased to announce the promotion of Joe Ratterman to President and CEO. As one of the founding employees, Joe has been a huge part of BATS success. I believe he is the right person to lead the company to the next level. While at Bridge and Lab One, Joe managed technical organizations as large as 650 people. As BATS grows and matures, it is healthy to be lead by a professional manager such as Joe. Joe's promotion had unanimous support from BATS board of directors. The idea and the timing were at my suggestion.

As BATS prepares to become an exchange, my ownership of a broker-dealer precludes me from serving in management. I believe this is a good time for me to step out of the way so as not to hold back the progress. BATS was created to be a neutral, private, broker-dealer owned, semi-profitable utility. >From the start we took our "Chinese Wall" very seriously. Early on BATS moved 2 miles away from Tradebot (out of sight - out of mind). No party owns more than 20% of BATS. None of the remaining BATS associates have any ties to Tradebot. My departure resolves any remaining appearance of a conflict of interest.

I look forward to my ongoing role on BATS board of directors where I will advise the company on market structure issues. After a short transition, I will be rejoining Tradebot Systems as its Chairman. Today, Tradebot is focused on proprietary trading of U.S. equities. My goal is to help them expand into other asset classes and geographies.

In June 2005, I started BATS ECN to restore competition among market centers. Two years later, we have largely accomplished the original goal. Together, we have created the third largest equities market center – and we should be proud.

Running a market center is an once-in-a-lifetime opportunity and I thank you for your support throughout the process. Every morning I asked myself how we could take our 5 year plan and make it into a 1 year plan – this is running at BATS speed. I have no regrets.

I’d like to think I did a good job of laying out a compelling vision and attracting an outstanding team. Some liked and some hated my emails, but they were widely circulated and got us nationally known quickly and at little cost. Many think I am a little crazy, and I tend to agree. I think most successful entrepreneurs are wired differently from the rest of us.

The “January Effect” was one of my highlights, being the capstone of an amazing run from a low 1 million shares in July 2006 to a high of 399 million shares just before Reg. NMS took effect. Becoming an exchange is the last major hurdle we need to overcome.

My other highlight was a chat with John Thain. It started, “How did 2 electrical engineers from Missouri and Illinois end up in the middle of Wall Street?”, and ended with us joking, “The enemy of my enemy is my new best friend.”

I am bullish on BATS. BATS is now well capitalized and well positioned. Nasdaq must focus on their short-term quarterly earnings. BATS is dealer-owned and focused on building a market that operates for the benefit of our subscribers. Over time, I believe this is a huge advantage.

Now is the time for BATS to shift to a more mature image, while remaining very nimble and growth orientated. I was the right person to get BATS started – Joe is the right person to take us to the next level.

From the very beginning, we intended to take market share from Nasdaq and they intended to stomp us out of existence. I criticized their business plans and at times even their leadership style. Mr. Greifield is a very capable and experienced executive. I am sure did not take my comments personally, but instead was probably amused and challenged by the competition. I would be happy to buy him dinner if he would like to normalize relations.

Meanwhile, back in Kansas City
I have two kids and who are average swimmers. At last night's swim meet, they each surprisingly won one of their heat races. "Daddy, daddy, I won, I won, look at my ribbon!" said my son. My kids will never swim in the Olympics, but last night I was very proud of them. The Thursday before I was traveling on business and missed their swim meet. At the end of my life, I wonder if I will remember the business trip or the swim meet.

Ben Franklin once said "Those who love life should not waste time, because time is the stuff life is made of." This is the essence of why I pushed BATS to move quickly.

BATS started with an email which I sent to 65 people (see below). Thank you all for forwarding my emails around the industry. BATS never would have succeeded without your support. Hopefully, some of my writings encouraged people to think and consider using BATS.

People have asked whether I will be sending emails from Tradebot. I have not decided yet, it will depend on whether there is sufficient interest. Please email dave@tradebotsystems.com if you would like to be on my new distribution list. Emails will not start until I have fully transitioned to Tradebot.

Please hit your reply button now
I always thrived on the feedback these emails generated. One last time, I ask for your feedback on "How has the emergence of BATS changed the industry?" Love it, hate it, highlights, regrets, suggestions - give it to me straight and right to the point.

Best wishes until our paths cross again...

Dave Cummings
(816) 285-9910

Topics: ECNs
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