CapWest, Another Broker-Dealer That Sold Private Placements, Winds Down Its Business

Friday, September 02, 2011 07:38
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CapWest, Another Broker-Dealer That Sold Private Placements, Winds Down Its Business

Tags: independent broker-dealers

Colorado-based CapWest Securities has asked FINRA and state regulators to terminate its securities licenses.

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In its heyday, the firm was another big seller of the exotic private placements that doomed broker-dealers like QA3 and almost sank Securities America.

 

But after the issuers of those securities went bankrupt, CapWest saw its core business implode while arbitration awards ate up the profits that remained.

 

At the end of last year, CapWest was still limping along at close to $3 million in revenue a year, but it also owed at least $1 million in unpaid awards to angry clients.

 

Most recently, it showed up in industry databases as having 23 advisors on its rolls but well under $1.5 million in AUM -- a total of five known client accounts remaining.

 

We knew from CapWest's SEC filings that its survival as a going concern was in question. 

 

By this point, the investors have already fled. It remains to be seen where the remaining advisors will go.

 

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