Catching Up With Mike Plunkett

When Mike Plunkett, who was president of Instinet North America, left the electronic brokerage firm two weeks ago, it came as a surprise to many of in the media that had talked to him over the years.Plunkett said the parting was amicable. "It was time for me to see what else was going on in the world," said Plunkett in an interview two weeks ago. Plunkett said he would take some time to gather his thoughts.

"It's nice to be able to step back and analyze the market and analyze the opportunities out there and see where the skill set works best," said Plunkett. "We had good times," he said. "When you're in the middle of it, you don't appreciate it," he said.

There's no doubt that Plunkett, the father of five, will be returning to Wall Street. "I have a passion for the business," he said. "Instinet is like my sixth child, actually my oldest," said Plunkett, whose kids are ages 17, 16,14 and one year-old twins. Plunkett joked that he needed to get out of the house so he didn't have to change diapers.

Clearly, Plunkett was adjusting to his freedom when I spoke to him two weeks ago. He had not yet set up his central nervous system - his Blackberry and his PC. I called him up again last night to see what had changed in the past two weeks. He is now wired to a Blackberry and spent a small fortune assembling a new MacBook Pro.

Plunkett worked at Instinet for 17 years before becoming president in 2003. When he joined the agency broker in 1991, Instinet was executing 8 ½-to-10 million shares a day, and two weeks ago did 1.2 billion shares. Plunkett's first job was on the floor of the New York Stock Exchange, working for an independent brokerage firm wired into Drexel Burnham Lambert and Dillon Read. Then he moved upstairs to Boston Securities as a sales trader handling equities and options. "That's how I met Instinet - I used to do their listed equities order flow," said Plunkett.

During his tenure, the brokerage firm made a number of acquisitions. Instinet bought Lynch Jones & Ryan (LJR) in 2001; it bought Island ECN (from Datek) in 2003 and Bridge Trading in 2004. In a span of four years, Instinet also went through a couple of transitions, going from private to public and back to public again, recalled Plunkett.

In the summer of 2005, Instinet's parent, financial news and data provider Reuters sold Instinet Group to The Nasdaq Stock Market, which simultaneously sold LJR to Bank Of New York. Nasdaq kept INET for its electronic matching engine, and then turned around and sold Instinet's institutional broker to Silver Lake Partners, which took the firm private. Eight months later, Silver Lake sold the firm to Nomura Securities International for $1.2 billion. "Those things can be extremely distracting internally to the organization. I think we navigated some difficult terrain there and kept the boat facing in the right direction and we saw that play out over the next 12-to-15 months," he said referring to the Nomura deal.

Now, Plunkett is weighing his next move. "I've been speaking to a handful of people," he revealed last night. He is closely monitoring what's going in the CCA space. "There's a handful of ideas in the market," said Plunkett. From my conversations with him, Plunkett is very plugged into industry chatter about setting up a consortium to consolidate CCA balances into a neutral entity. With the default of Lehman Brothers, buy-side firms have become quite nervous about keeping their commission dollars on deposit with broker dealers if they should go out of business.

"When the dust clears there will be certain types of efficiencies that people want, like CCAs," said Plunkett. Instinet was a pioneer in CCAs through its BrokerShare program and when Plunkett was there, he spearheaded T-Share, a CCA consolidation service.

"From my Instinet days, having a neutral third party objective approach to business is near and dear to my heart," he said. "It's peaked my interest and I'm looking at it," he said. But he said he would need to talk to Instinet about it first to see if it mattered to the firm.

In fairness to all parties, Plunkett said he would be ready go back into the business around the second quarter of 2009, assuming it was something on the sell side. But if the right opportunity comes up, I think Plunkett could be on the job a lot sooner. "I have no choice. It's in my blood," said Plunkett.From my conversations with him, Plunkett is very plugged into industry chatter about setting up a consortium to consolidate CCA balances into a neutral entity. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio