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May 11, 2018  

Rumor Mill Churns Amid KeyBank Departures

A continuing series of staff departures is prompting speculation about the future of KeyBank’s structured-product brokerage unit.

While there’s no official word on the fate of the operation, some industry participants see the moves as a sign its days might be numbered. Others suggest the bank merely is paring down to reflect a market-wide decrease in trading activity.

Either way, many of the sales and trading professionals that Key hired while establishing the division are gone.

Chief among them is Michael Corsi, who exited his New York post as co-head of securitized-product sales in March. While it’s possible Corsi left on his own accord, sources said there’s also a chance he was pushed out. The reason: He was arrested in May 2017 for allegedly speeding in his Ferrari while drunk and carrying a loaded pistol. The case is pending in a Connecticut state court.

Corsi had arrived in March 2016 from RBC. Earlier, he worked at Knight Capital, MF Global, Deutsche Bank and RBS.

Also gone is Atlanta-based sales specialist Patrick Carvell, effective this week. Carvell had arrived at Key in 2010 after stops at HBK Investments and J.P. Morgan.

Meanwhile, one source said Key has scaled back the scope of Joe Vaccaro’s work as head of structured-product trading. Vaccaro had joined Key’s New York office from RBC alongside Corsi and several other colleagues, and before that worked at Amherst Securities, Merrill Lynch and Bear Stearns.

The moves follow the 2017 exits of traders Sung Cho and Jiwon Park, and salesmen Christopher Flaten, Christopher Morello and Matthew Petri — each of whom also had arrived in 2016. Cho, who was part of the former RBC team, is looking for work. Park, also from RBC, is at Hunt Financial. Flaten, from RBC, and Petri, from Credit Suisse, are at Mizuho. Morello, previously of Amherst, now works at Performance Trust.

That said, Key continues to employ a number of structured-product sales and trading specialists beyond Vaccaro. They include Corsi’s sales co-head, Keith Newman — a former BB&T Capital executive who has been on the bank’s payroll since 2010.

Salesman Daniel Abraham, Christopher Heaney and Chris O’Neill also are part of the remaining staff. What’s more, one Key insider said the unit is hiring. He pointed to the November addition of trader Kevin Gordon from Cowen Prime Services.

While Key has long maintained a presence in the structured-finance business, the bank especially appeared to be getting its footing with the arrivals of Corsi, Vaccaro and the other 2016 recruits. To that end, one investor said the recent departures would make sense in light of slow trading activity. “It’s very easy to ramp up and ramp down,” he said, characterizing such fluctuations as something that could be accomplished virtually “overnight.”

Considering how long Key’s headcount has been declining, however, another source said the bank appears to be withdrawing amid expectations of a longer-term reduction in trading. To that end, he said he expects more staffers to leave.

The Key insider denied any plans of a shutdown, and characterized the bulk of the departures as voluntary. “It’s the nature of the business right now,” he said. “When times get tough, a lot of guys see the grass as looking greener elsewhere.” ?