If you can’t beat ‘em, buy ‘em. That’s what Merrill Lynch did last month when it hired Rohit D’Souza, Morgan Stanley’s electronic-trading whiz. Eight years ago, after stints designing algorithmic risk management and trading models at Barra and Investment Technology Group, D’Souza joined Morgan Stanley. As a key architect of the highly automated Passport system, he helped make Morgan Stanley a pioneer in the “black-box” trading craze that is now sweeping Wall Street (Institutional Investor, June 2004). Merrill, a laggard in the algorithmic trading game, is making D’Souza the head of a newly created group encompassing global equity trading -- both cash and derivatives -- and prime brokerage.
The slight, mild-mannered 40-year-old, who starts at Merrill this month, declined comment on his new duties. But with commissions declining and liquidity fragmented into tiny, faster-moving pieces, D’Souza’s elevation underscores the newfound strategic importance of black-box trading.
“It’s a huge loss for Morgan Stanley and a huge gain for Merrill,” says a veteran program trader who knows D’Souza. “There are only a handful of guys on the Street with his skill set.” Morgan Stanley, meanwhile, has assigned other executives to absorb his responsibilities.
