Two senior executives at J.J. Kenny Drake Inc. have resigned to join Cantor Fitzgerald Fixed Income Brokers Inc., a Kenny spokeswoman confirmed yesterday.
Thomas A. Mulrooney, senior vice president and director of trading at Kenny, and Arthur J. Gillin, a senior vice president there, yesterday resigned effective immediately to start up an electronic municipal information screen for Cantor, market sources say.
In addition, Alfred B. Poto, former executive vice president at Titus & Donnelly Inc., will become a managing director at Cantor, said Robert Mercorella, managing director at Cantor.
Cantor also is negotiating a possible return by several of the municipal professionals who left it last month for Tullet & Tokyo Inc., Mercorella said. Approximately 20 municipal professionals left Cantor to start a municipal finance department at British-owned Tullet & Tokyo, a London-based firm that brokers foreign exchange transactions and U.S. Treasury issues.
"We are speaking with those individuals who have left, and nothing final has been concluded," Mercorella said.
At Cantor, Mulrooney and Gillin will be in charge of information services, Mercorella said. He declined to give specifics. Poto will head Cantor's muni trading operations.
Mulrooney has been at Kenny Drake for seven years. He ran the firm's back office operations before becoming head of the municipal finance department about two years ago, the Kenny spokeswoman said.
Gillin began working at Kenny in 1989, where he was in charge of the McGraw-Hill Municipal Screen. Mulrooney, Gillin, and Poto could not be reached for comment.
"We are extremely pleased to have these guys with us," Mercorella said. "We're strengthening our muni trading department in order to take advantage of potential expansion in the market. We believe under the direction of these three we'll be building a premier operation on Wall Street."
The J.J. Kenny spokeswoman said the firm is not concerned about the departure of its two former executives. "J.J. Kenny is a very strong company," she said. "It's been in business for 44 years. We have enormous faith in the company and the trading floor. We intend to keep our position in the industry."
Several market sources said rumors about the departures from the country's biggest broker's broker had been circulating late last week. "Most guys knew something was up on Friday, so nobody's surprised," one municipal dealer said.
Other market sources speculated that the departure of Mulrooney could spur additional defections.
"Mulrooney is the key guy because he runs the whole operation. If they've got him, they could get a bunch of people to walk with him," one market source said.
The executives' departures are not the first since J.J. Kenny was acquired by McGraw-Hill in 1989. Eighteen traders left J.J Kenny in 1990 to form Municipal Partners Inc., another dealer-to-dealer broker. Virtually all of the traders had been working at Clifford Drake when it was acquired by J.J. Kenny in 1989. An official at Municipal Partners said at the time that the McGraw-Hill acquisition prompted the formation of the new firm.
Cantor Fitzgerald, founded in 1947, primarily deals with U.S. government securities and has over 1,000 employees. Before the Tullet & Tokyo departures, the municipal bond department at Cantor was one of the largest broker's brokers. The department specialized in the trading of New York issuers' bonds. A broker's broker serves an an intermediary between dealers and large institutional investors in the sale of large blocks of municipal bonds.
J.J. Kenny Co. was founded in 1949 by J.J. Kenny, also known as Jack. He was succeeded by his son, J. Kevin Kenny, in 1961,
In 1962, the firm introduced the Kenny wire, a teleprinter that displayed bonds out for bid with dealers nationwide. Kenny entered the information business in 1975, offering a descriptive data base and evaluation service.
In 1989, Kenny acquired one of its largest competitors, Clifford Drake & Co., and its Clifford Drake screen, which showed live quotes for active dollar bond markets. After the acquisition, the screen became known as the Kenny Drake screen. After McGraw-Hill's acquisition of Kenny was completed in 1990, the screen became known as the McGraw-Hill Municipal Screen.
J.J. Kenny, the nation's largest broker's broker, has 539 employees, three broker offices, and three sales offices. Its president and chief executive officer is James R. Quandt, who succeeded Kevin Kenny in March 1992.
Cantor Fitzgerald, J.J. Kenny, and Titus & Donnelly are three of the six brokers that contribute to the evaluations used to put together The Bond Buyer's daily Municipal Bondindex.
