BATS Global Markets has taken the chairman's role away from Joe Ratterman, also its chief exective, just days after the equities exchange had to cancel its initial public offering due to an IT crash.
The board at BATS, the US' third biggest exchange after the New York Stock Exchange and Nasdaq, insisted it unanimously supported Ratterman as president and CEO of the company. BATS said the move was down to implementing better corporate governance.
But James Angel, a professor at Georgetown University who specialises in the structure and regulation of financial markets, told Reuters that the timing of Ratterman's departure was notable, given the IPO cancellation. "You can't ignore the timing of it," he said. "It is basically a very strong signal that mistakes of this nature can't be tolerated."
Glitches hit the market debut of BATS last Friday, causing the IPO to be cancelled. Last weekend disagreement also emerged between Ratterman and Dave Cummings, the founder and a director of BATS, over the exchange's future IPO plans, it was reported. Ratterman will carry on holding the chairman's role until a successor is found.
Ratterman said this week that a "software bug related to facilitating IPO auctions" was the cause of the problem last week. "This was the first corporate IPO on the BATS Exchange. While we had spent months testing our system, an unforeseen bug appeared during the BATS IPO auction that caused the system failure," he said.
"Unfortunately, sometimes technology implementations are prone to failures and unexpected outcomes even after going through rigorous testing," he added.