Rolfe & Nolan removes Lodge as CEO

The decision to remove Lodge followed a strategic review meeting last week, where the board decided an immediate management change was needed to ensure that Rolfe & Nolan’s agenda was refocused on its core business of back-office derivatives trading systems.

Lodge will be replaced, with immediate effect, by Bob Freeman – previously Rolfe & Nolan’s European managing director, who told RiskNews that he is confident he can carry out both the chief executive officer role as well as maintaining his former responsibilities, adding that he plans to "dramatically cut back on corporate activities".

Lodge had planned to tap funds from major clients Royal Bank of Scotland, UBS Warburg, Deutsche Bank and Barclays to deliver new derivatives back-office systems through the Merlin project. "We’re supremely confident we will secure the funding to build it," said Lodge in an interview with RiskNews’ sister publication D&RT - now called Risk Technology (www.risktechnologynews.com) - in July. "We obviously don’t have a massive amount of cash, but the backers want it; they see big savings and benefits. In concept some are interested [in giving finance] but none have signed."

But it appears investors wanted quicker action. "The approach needs to be much more collaborative, funding in return for real business benefits," Freeman said.

Freeman added that Rolfe & Nolan would continue with its Merlin project but also needed to urgently address shareholder concerns about the firm’s profitability. "I will make sure that neither time nor money are wasted. I have a keen awareness, which has been recently reinforced by shareholders and clients, of the need to stick to our service credentials and the core business. They don't want to see us extend ourselves with unrealistic agendas," Freeman told RiskNews.

Royal Bank of Scotland, UBS Warburg, Deutsche Bank and Barclays have reconfirmed their commitment to Merlin, including their willingness to resolve funding issues, following meetings between Freeman and bank officials last week. "Merlin needs to be properly resourced. We've agreed with the four sponsor banks involved that we'll sit down with a blank sheet of paper and negotiate an appropriate commercial basis for funding," Freeman said, adding that he intends to resolve funding issues within six weeks.

Freeman now faces what could prove to be a make-or-break situation for both his career and the future of Rolfe & Nolan, which still has to address investor scepticism over its scope for growth in an increasingly consolidated and commoditised financial services sector, coupled with client worries about the outdated state of some of its key technology. He will need to draw on all his 14 years at the firm to achieve this.

Rolfe & Nolan will unveil its figures for the first six months of the year in November.

Lodge, meanwhile, is said to be negotiating severance terms with Rolfe & Nolan’s remuneration committee. RiskNews was unable to contact Lodge for comment before going to press, but believes he has yet to secure a new position elsewhere.