Now that Securities America has settled its private placement obligations, the next question is whether a much smaller firm in Colorado will survive the saga.
CapWest Securities was linked with Securities America when the shadow of private placements fell a few years ago, but has been pushed from the headlines by its big counterpart's tribulations.
The Lakewood, Colorado firm sold $22 million worth of the same bad medical debt that hurt Securities America, along with plenty of untraded REITs.
Now it is wrangling with its insurance company to cough up enough cash to pay its fines -- the same problem that killed QA3 a few months back -- and faces its share of lawsuits.
As it is, CapWest recently reported that it lost $108,000 in the fourth quarter, pushing its operating capital down to $80,000.
While the company only needs $50,000 in capital to remain open, all it would take is another significant operating loss -- or a negative legal judgement -- to default on its reserve requirements under the Securities Act of 1934.
It's an open question whether CapWest's parent Capstone Financial Group can or will pump more money into the firm to keep it afloat, as Ameriprise helped settle Securities Americas' liabilities.
Meanwhile, CapWest's website seems to be down for repairs.