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.
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.