The abrupt departure of John Eley from Hotspot FX has set tongues wagging across the foreign exchange markets. News that Eley had relinquished his post as president and chief executive was announced in a bland release issued by Hotspot’s new parent, Knight Capital, on 10 August. A week later, Eley was still listed on Hotspot’s website as being in his previous position, suggesting his departure was not one that was part of a considered strategic thinking process.
Naturally the management change has led to gossip; one active hedge fund manager joked that Hotspot might as well be rebranded as “Wetspot”.
Talk is that the site has lost some of its liquidity support and that its volumes are falling. Knight does not yet provide any breakdown of Hotspot’s turnover but a spokeswoman says it has been adding new clients at a “slightly faster pace this year than in 2005”.
The company also said, in response to market reaction following Eley’s departure: “We are proud of our Hotspot employees and technology, and we are committed to the ECN-based platform – the right model for the future. The electronic foreign exchange trading market place holds tremendous opportunity, and we look forward to maximizing Hotspot’s potential.”