Vinnie Viola, President-elect Donald Trump’s nominee for secretary of the Army, plans to build a cyber warfare force for the future by applying the same vision that made him a Wall Street billionaire and transformed the Florida Panthers from one of the National Hockey League’s worst franchises into one of its most promising.
Viola said Monday that he will step down as chairman of his high-frequency trading firm Virtu Financial upon confirmation by the Senate and hand the job to CEO Doug Cifu. The two are expected to remain partners in control of the Panthers.
“The American people, whether civilian or military, should have great confidence that Vinnie Viola has what it takes to keep America safe and oversee issues of concern to our troops in the Army,” Trump said.
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Viola, who said in a speech five years ago that “the Army is going to have to rethink the model of a warrior” in order to fight cyber attacks, is a 1977 graduate of the U.S. Military Academy at West Point, N.Y. He served as an infantry officer with the 101st Airborne for five years and later bankrolled the academy’s Combating Terrorism Center after the Sept. 11, 2001, attacks, during which he was instrumental in evacuating employees in the financial district and spearheading a prompt resumption of trading on the New York Mercantile Exchange in a building near the fallen Twin Towers.
“This great honor comes with great responsibility, and I will fight for the American people and their right to live free every day,” said Viola, 60.
The deeply patriotic Viola grew up in the working-class Williamsburg neighborhood of Brooklyn as the son of immigrants from a small Italian village. His father and five uncles served for the U.S. military in World War II.
When Viola was 16, anti-Vietnam War demonstrations were commonplace, and during one at his high school, he and a few friends hoisted American flags and confronted protesters. He described it as “an interesting face-off” for “that small minority of us who felt this almost romantic attachment to the ideals of the country” in an interview for the West Point Center for Oral History.
Viola bought the foundering Panthers in 2013 for $230 million and quickly put his fingerprints on the team, installing fellow West Point grads in management positions, redesigning uniforms with a shield logo and sleeve patches, holding training camps at West Point, and honoring veterans at every home game. Under Viola, the Panthers have invested in the roster by signing Jaromir Jagr and up-and-coming young players and returned to the playoffs.
Viola made his fortune — listed at $1.79 billion by Forbes magazine — in the controversial industry that uses computerized algorithms to trade stocks at high speeds. It drew scrutiny after journalist Michael Lewis (author of “The Big Short” and “Moneyball”) wrote “Flash Boys,” claiming that high-frequency trading firms have an unfair advantage over other investors.
Although Viola did not donate to Trump’s campaign, the president-elect hosted an August rally at the BB&T Center in Sunrise, the home arena of the Panthers. Trump’s campaign paid $77,215 to an affiliate of the Panthers’ parent company to lease the space.
Viola has donated to various campaigns since 2003, including those of Democrats considered Wall Street allies and Republican presidential candidates John McCain and Mitt Romney, federal records show. Democrats including Hillary Clinton have called for more regulation of high-frequency trading and regulators said the industry contributed to the stock market “flash crash” of May 2010. The 2016 Democratic Party Platform called for “a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading, which has threatened financial markets.”
In a required disclosure to investors filed in November, Virtu stated that the firm has “been the subject of requests for information and documents” from the Securities and Exchange Commission and New York Attorney General Eric Schneiderman, who have been conducting investigations of the industry. Two major banks settled cases for $154 million earlier this year. Virtu has not been charged with wrongdoing.
Virtu has been “the most consistently profitable market maker in the history of electronic trading,” according to a Bloomberg article. Viola’s military background and personal discipline have been crucial to the company’s success, said Richard Repetto, an analyst who covers Virtu for Sandler O’Neill in New York.
“He believes in strong leadership by example,” said Repetto, a 1980 West Point graduate. “The stock has pulled back a bit, but it’s still highly profitable. It’s because they stayed very conservative in their trading strategies and are very disciplined in their risk management, and that’s down to the leadership.”
Viola and his wife own a six-floor Upper East Side mansion that they bought for $20 million in 2005 and tried to sell eight years later for $114 million, described as “turgidly ornamental and giddily gaudy” by Variety. Viola was a former part-owner of the NBA’s New Jersey/Brooklyn Nets.
Viola was proud to be a West Point cadet even at the height of anti-military fervor in the U.S. He intended to become a career officer, not a financier. But in 1980, while posted at Ft. Campbell as a second lieutenant, the health of his father, a truck driver, began to fail due to heart disease and alcoholism. On leave, he took his father back to his hometown of Sanza, Italy, where he reunited with grateful, tearful villagers who remembered how he had brought them food when they were starving during World War II and he was on duty.
Although Viola felt guilty when he left the Army, he needed to help his family pay the bills. He got a job as a local trader in the “gasoline pit” of the New York Mercantile Exchange and compared the floor to a “platoon environment.” He attended New York Law School at night.
In Leah McGrath Goodman’s 2011 book “The Asylum: The Renegades Who Hijacked the World’s Oil Market,” former NYMEX chairman Lou Guttman said that Viola had a temper but “exuded leadership” and “drew people in. Even if he didn’t know what he was talking about, he sounded like he knew what he was saying.”
Viola set up a dojo in his office to study kung fu, and his dream was to become ambassador to Italy or the Vatican, according to Goodman.
As a philanthropist, Viola has contributed money to West Point, the Army’s Cyber Institute and to bilingual education programs, and he endowed a chair in Catholic theology at Fordham University.
One of Viola’s favorite terms is “gestalt,” and he has said the U.S. Army will ultimately rely on a “gestalt of geekdom.”
“We’ve got to find geeks who love their country,” Viola said in a 2011 talk covered by the Defense Systems website. “At my company, I’ll gladly trade 10 pull-ups and five minutes on a run for 20 IQ points and heart.”
Matthew Caldwell, president and CEO of the Panthers, said Viola was thrilled with the nomination.
“This is like the crown jewel of his career, to give back and serve,” said Caldwell, also a West Point graduate. He said Viola would transfer his NHL governorship to Cifu and that ownership of the team wouldn’t change. “Vinnie is so passionate about the Army. He’s brought great values to the team, and the players feel that and show that in the way they compete.”
Among those supporting Trump’s nomination is Sen. Chuck Schumer (D-N.Y.), the recipient of a Viola campaign contribution in 2009, who tweeted: “I’ve known Vinnie Viola for over a decade and his dedication to the US Army is second to none.”
Retired General Ray Odierno, former chief of staff of the Army, also praised Viola.
“A West Point graduate and longtime supporter of our soldiers, Vinnie has demonstrated a unique capability to build innovative and agile teams,” Odierno said. “He will bring a wealth of business experience and military understanding to this critical national security position. An inspiring choice.”
Miami Herald reporter George Richards contributed to this report.