First broker failure of the year: due to fraud? [View all]
Added info: Note the REST of the story below this one, which explains WHY the company may have closed its doors ( fraud)
WJB Capital Halts Brokerage Operations
WJB Capital Group Inc., a Wall Street firm with more than 100 employees, shut its brokerage operations amid “financial issues,” according to the company’s attorney.
“A decision was made -- and I might say it was a very painful decision -- that it would terminate its broker-dealer operations, and it has done so,” Mark Skolnick, general counsel for the company at law firm Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow LLP, said today. The closely held firm has some non-brokerage operations and is exploring “other possibilities,” he said in a phone interview today.
WJB Capital was “unable to raise capital in a manner that would have allowed the firm to continue its operations given the current climate and the constraints that would have been placed on everyone,” Chief Executive Officer Craig A. Rothfeld said in an interview. The New York-based firm shut voluntarily, he said.
Note: Unlike MF global the company holds no client funds nor is it going to file for bankruptcy...but it IS closing, after expanding twice since 2005.
denninger has a take on it in his Market Ticker today also...
WJB Capital Group Sued for Alleged Fraud
WJB Capital Group Inc. the Wall Street firm that said it shut down its brokerage operations, was sued in New York over an alleged fraud.
WJB Capital and its chief executive officer, Craig Rothfeld, were accused of fraud and breach of contract by an individual who said he made a $250,000 investment in the company, according to a complaint filed Dec. 31 in New York State Supreme Court in Manhattan.
The plaintiff, James McNally, said in his complaint that he was promised “compensation for the duration of the investment.” WJB Capital failed to pay and used the money “for fraudulent purposes,” according to the complaint.
Rothfeld said in a phone interview that McNally provided an eight-year, $250,000 loan to the firm, not an equity investment, and received monthly interest.