Private Placements Claim Another Brokerage Firm?

Monday, June 06, 2011 03:17
edit
Private Placements Claim Another Brokerage Firm?

Tags: independent broker-dealers | recruiting

Another of the broker-dealers that sold the instruments that ravaged Securities America and several smaller firms -- not to mention the clients who bought them -- has reportedly started shutting down.

This Website Is For Financial Professionals Only


 

There's nothing on WFP Securities' public record or site yet, but the firm has reportedly told FINRA that it's winding down its business.

 

Speculation is that the $33 million in private offerings from now-tainted firms Medical Capital Holdings and Provident Royalties was a factor in management's decision to shut down.

 

As yet there hasn't been much buzz about those securities -- or any lawsuits associated with them -- dragging WFP under. The firm's last SEC FOCUS report only alluded to a looming arbitration claim and FINRA investigation that could cost over $14 million.

 

For a firm that only had a net $88,000 in shareholders equity last June, that kind of legal bill could be fatal.

 

And since WFP generated gross revenue of $2.4 million last year -- and had to kick half of it back to its corporate parent -- it's far too small to raise that much cash fast.

 

 

 

 

Comments (0)

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.

busy