informa
/
2 min read
article

Ameritrade Consolidates Technology Systems, Names Co-CIOs

Ameritrade to consolidate its technology systems as part of a massive reorganization.
Ameritrade Holding Corp., home of the $8 online trade, said Wednesday that it plans a massive reorganization of its business to focus on two specific revenue streams.

Admitting that the company has struggled in the adverse economic environment over the past year, CEO Joe Moglia says that this is the beginning of an ongoing effort to cut costs and increase profits. The company is consolidating its subsidiaries into two business units--a Private Client division and an Institutional Client division. Because Ameritrade has been composed of several independent subsidiaries obtained through acquisition, the reorganization is part of an effort to eliminate redundancies, particularly in the technology systems, and streamline the management team.

Key to the success of the reorganization will be the consolidation of the company's technology. Accumulated over the last years through acquisitions of subsidiaries such as Accutrade, OnMoney, and TradeCast, these disparate technology systems will be unified under a centralized group. The division will be overseen by newly appointed co-CIOs, Mok Choe and Ray Drury. Current CIO Jim Ditmore is resigning to pursue personal interests, according to Ameritrade. Choe is being promoted from his current position as VP of the application development group, while Drury is moving up from his position as senior VP of operations in the OnMoney division.

Ameritrade has seen a drop in the number of securities transactions processed during the economic slowdown. For the six-month earnings period that ended March 30, the company's revenue fell 13%, to $282.3 million, over the same six-month period last year. Net losses were $77.2 million for the six months, while a year ago the company lost $18.5 million. Still, Ameritrade tried to expand its technology-based services during that time. The $40 million acquisition of TradeCast that was completed in April will improve Ameritrade's offering of business-to-business direct-access online stock trading.