Chicago B-D, with 90 reps and $200M, set to shut

Another small broker-dealer is closing its doors due to not having enough capital on hand to meet industry rules to remain open for business &#8212; <a href =http://www.investmentnews.com/apps/pbcs.dll/section?category=specialreporttemplate&amp;issuedate=20100616&amp;sid=bddown>at least the seventh B-D to shut down this year</a>.
DEC 22, 2010
By  Bloomberg
Another small broker-dealer is closing its doors due to not having enough capital on hand to meet industry rules to remain open for business — at least the seventh B-D to shut down this year. Chicago Investment Group, with about 90 brokers and $200 million in client assets, revealed the shortfall last week in its annual Focus filing with the Securities and Exchange Commission, according to a source who had read the report but asked not to be named. Richard Lynch, CEO of Chicago Investment Group, on Monday did not return phone calls to comment. Several broker-dealers, including Newbridge Securities Corp., are attempting to move the Chicago Investment Group reps to their firm, sources said. Like Newbridge, Chicago Investment cleared its securities transactions through Legent Clearing LLC. Robert Spitler, president of Newbridge Securities, did not return a call to comment. Inability to meet the net-capital requirements of the Financial Industry Regulatory Authority Inc. has forced some small and independent broker- dealers to shut down this year. Just last week, Jesup & Lamont Securities Inc. was told by Finra it could not open after its capital fell to a level deemed inadequate to fund continued operations. In March, GunnAllen Financial Inc., facing tens of millions of dollars in legal liabilities, went out of business after it violated net-capital rules, scattering 400 reps and advisers — believed to be the largest closure to date. (See the list of closures here.) The market downturn of 2008 and early 2009, coupled with pressure from securities regulators, is putting a squeeze on firms that don't carry an excess of net capital, observers said. (Read more about why small broker-dealers are shuttering, from today's print edition of InvestmentNews.)

Latest News

JPMorgan tells fintech firms to start paying for customer data
JPMorgan tells fintech firms to start paying for customer data

The move to charge data aggregators fees totaling hundreds of millions of dollars threatens to upend business models across the industry.

FINRA snapshot shows concentration in largest firms, coastal states
FINRA snapshot shows concentration in largest firms, coastal states

The latest snapshot report reveals large firms overwhelmingly account for branches and registrants as trend of net exits from FINRA continues.

Why advisors to divorcing couples shouldn't bet on who'll stay
Why advisors to divorcing couples shouldn't bet on who'll stay

Siding with the primary contact in a marriage might make sense at first, but having both parties' interests at heart could open a better way forward.

SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives
SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives

With more than $13 billion in assets, American Portfolios Advisors closed last October.

William Blair taps former Raymond James executive to lead investment management business
William Blair taps former Raymond James executive to lead investment management business

Robert D. Kendall brings decades of experience, including roles at DWS Americas and a former investment unit within Morgan Stanley, as he steps into a global leadership position.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.