Ex-GunnAllen boss sets sights on small B-Ds

John Sykes, the former chairman and shareholder of GunnAllen Holdings Inc., is back in the business of acquiring small independent broker-dealers. His firm, JHS Capital Advisors Inc., announced last week that it intends to buy the retail-brokerage operations and assets of Paulson Investment Co. Inc., the retail broker- dealer of Paulson Capital Corp. The Paulson broker-dealer will continue to operate independently, according to a statement by the two companies. But after the completion of the transaction, which is subject to the approval of regulators, Paulson representatives will become registered reps of JHS and continue to use the clearing services of RBC Correspondent Services, according to the statement. JHS has about 100 advisers, who manage more than $2 billion. Paulson Investment Co. has about 75 reps, who oversee $1.1 billion in client assets. Terms of the asset purchase weren’t stated in the announcement. “At JHS, we’ve experienced exceptional growth during the past year, and this transaction further enhances our business development strategy,” JHS chief executive Scott Bendert said in a statement. Meanwhile, Paulson will continue to focus on investment banking, Chet Paulson, the firm’s founder, said in the statement. JHS Capital Holdings Ltd. bought Pointe Capital Inc. in December 2009 and renamed it JHS Capital Advisors. Mr. Sykes, who resigned as chairman of GunnAllen Investment Holdings, is the chairman of JHS Capital Holdings. A few months later, GunnAllen Financial Inc., one of the fastest-growing independent broker-dealers of the past decade, collapsed due to costs and legal fees thought to be more than $50 million. Those fees stemmed from actions related to rogue broker Frank Bluestein, as well as failed private investments. Mr. Sykes invested in preferred shares of GunnAllen Holdings in November 2008.