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Ameritrade Names CEO

March 06, 2001|Associated Press

Internet broker Ameritrade Holding Corp. (AMTD) on Monday named a new chief executive pulled from the ranks of a more traditional financial services company.

Joseph Moglia, a senior vice president at Merrill Lynch, will join Ameritrade this month.

"I would never have left had I not been so impressed with the opportunities at Ameritrade," said Moglia, who has been with Merrill Lynch for 17 years. Most recently, Moglia headed the investment and product group for Merrill Lynch's small investors.

Propelled by investments in technology and rates as low as $8 a trade, Ameritrade has become one of the top 10 online brokerages.

But along with rivals, it has struggled in the midst of the market downturn. The firm laid off 300 temporary and full-time workers in January and its stock has dropped from a high of $25.17 last March to the $8 range.

On Monday, Ameritrade fell 59 cents, or nearly 7%, to close at $8.34 a share on the NYSE.

Founder and Chief Executive J. Joe Ricketts, who will remain as chairman, said Moglia's appointment did not signal a change in company strategy, which has relied on investors who make trades without advice from the brokerage firm.

"The fact that we hired somebody from the industry is probably more a validation of what we've done in the past," Ricketts said.

Moglia said he plans to retain Ameritrade's strategy--leveraging its technology and strengthening its brand name.

Ricketts, who founded Ameritrade 26 years ago, has been trying to pass on the CEO job since May, when he named Tom Lewis to the post. Lewis unexpectedly resigned in August and the search resumed.

Analyst Matthew Vetto of Salomon Smith Barney said Ameritrade has solid footing and Moglia should enhance its reputation.

"It's good to get a traditional financial services executive," Vetto said. "It bolsters the outsiders' view of the company."

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