SWS Undaunted By FINRA Fine, Raises $100 Million In New Equity

Tuesday, March 22, 2011 22:04
SWS Undaunted By FINRA Fine, Raises $100 Million In New Equity

Tags: compliance | FINRA

It looks like Dallas broker-dealer SWS was less distressed than would-be merger partner Sterne Agee hoped...even though the distress was admittedly fairly substantial.

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SWS announced yesterday that it's paid $650,000 to settle charges that it negligently allowed a corresponding firm, Cutler Securities to create a massive naked short position on an unspecified stock.


Cutler then defaulted on the short, leaving SWS exposed to a $6.3 million loss. But FINRA still came after the firm for lack of oversight. 


But while the fees -- and the losses -- hurt, SWS is not desperate for a "white knight" here. The company also announced that it's found $100 million in equity financing to shore up its troubled banking unit. 


When you consider that Sterne Agee was only willing to spend $200 million to buy the entire company, SWS is in much better condition now than just about anyone thought.


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