MF Global's chief executive exits after value of derivatives broker sinks by 90% in a year

MF Global, the derivatives broker spun off from FTSE 100 hedge fund giant Man Group last year, has ousted its long-time chief executive and issued another set of disappointing results.

Kevin Davis, who has been with the company for 17 years, bowed to calls from shareholders and is being replaced by Bernie Dan, the former head of the Chicago Board of Trade (CBOT) derivatives exchange, who joined the company in the summer. Brought low by the credit crisis, the collapse of Lehman Brothers and by a rogue trading scandal, MF Global has lost 90 per cent of its value since Man floated it on the New York Stock Exchange.

"It has been my privilege to work at MF Global for the past two decades and to have led it for the past 10 years," Mr Davis said yesterday. "I believe that it is now the right time for me to explore new opportunities."

His successor, Mr Dan, who oversaw the sale of the CBOT to the Chicago Mercantile Exchange, said: "The company has made tremendous progress over the last six months, improving risk processes and procedures, securing its capital structure and reorganizing the senior leadership team."

In February, MF Global sacked a rogue trader whose unauthorised dealing in the wheat market cost it $141.5m (£86.3 million). The incident, which Mr Davis described at the time as "anaberration", exposed flaws in its risk management systems and forced it into a costly refinancing. JC Flowers, the private equity firm, underwrote a $300m sale of preference shares to help restore the firm's battered balance sheet.

MF Global has its origins in a broking business founded more than 200 years ago in London by James Man andfocused mainly on trading sugar and other commodities. Expanding intoderivatives, it became the fourth-largest player in the $4.5 trillion-a-day global futures market.

The brokerage business was eclipsed, however, by Man's other business managing hedge funds, and the UK parent company decided to spin off MF Global last year, before the credit crisis struck. The flotation netted far less for the parent company than expected, but investors' disappointment in the FTSE-100 company has given way to relief.

Man Group retains a stake of less than 20 per cent in MF Global, whose shares were trading yesterday at $3.08, compared to their $30 float price. MF Global's second-quarter results missed expectations because of the cost of redundancies and falling trading volumes.