E*Trade Finance Chief Leaving to Join LPL Financial

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New York-based E*Trade said its chief risk officer, Michael Pizzi, would take over the finance department at the company June 15.

The move comes as E*Trade’s stock has gained, following years of restructuring after the financial crisis. Its stock is up about 45% in the past 12 months, buoyed by regulators’ recent approval of its capital plan and shareholder optimism that an increase in interest rates, expected later this year, will help the company’s earnings.

Mr. Pizzi, who is 40 years old, said he would focus on what to do with the $258 million in cash that the company had accumulated as of March 31.

“Capital deployment is number one top of mind,” he said. E*Trade’s management is contemplating stock buybacks, dividends and capital investments, but hasn’t yet tipped its hand on how it will use the .

Mr. Audette has been CFO since the beginning of 2011. He will become CFO of LPL Financial on Sept. 28. The firm, one of the largest independent broker-dealers in the country, has offices in Boston, Charlotte, N.C., and San Diego, where Mr. Audette will be stationed.

“If there was a time to go to another company, now would be the time,” said Mr. Audette, who turned 41 last Friday.

In recent quarters, E*Trade has steadily paid down debt, reducing its borrowings by almost $800 million to $1 billion.

E*Trade also announced earlier this year it will move its broker-dealer business out from underneath E*Trade Bank, where it has operated since the financial crisis, under additional regulatory scrutiny.

Among the issues facing Mr. Pizzi is an ongoing inquiry by the Financial Industry Regulatory Authority into E*Trade’s trading and execution practices. The company received a Wells Notice from Finra in March and said it continues to cooperate fully.

Mr. Audette said his departure had nothing to do with the notice and he added that he felt comfortable with E*Trade’s financial situation.

Mr. Pizzi’s risk officer role will be filled on an interim basis by Paul Brandow, a senior adviser to the company. E*Trade is looking for a permanent replacement.

A company spokesman declined to comment further on the regulatory action.

LPL has had its own regulatory struggles, which made it crucial that it hire a chief financial officer with experience in steering a company through tougher times, says LPL Chief Executive Mark Casady.
M. Audette “has seen the best of times and the worst of times as a CFO,” Mr. Casady said, “and that makes him incredibly valuable to a company like LPL.”

LPL paid $11.7 million in May to settle charges with Finra that the firm failed to properly supervise complex products. For all of last year, LPL spent $36.3 million on regulatory charges.

Mr. Casady says those levies were related to legacy issues that are in the process of being resolved through investments in technology and the hiring of additional compliance personnel. Now, the firm is in the process of shifting its attention toward growth.

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