More bad news for Jesup & Lamont

After being closed for business for three weeks, Jesup & Lamont Securities Corp. is now facing new allegations that could lead to further trouble for the embattled firm. On July 1, two weeks after the Financial Industry Regulatory Authority Inc. charged Jesup & Lamont with being out of compliance with net-capital rules and force it to stop trading, the broker-dealer was hit with charges it failed to protect customer funds and violated the net-capital rules for four days in 2008, according to the firm's record on Finra's BrokerCheck system. Finra also charged Jesup & Lamont with repeatedly failing to make proper disclosures about research reports and analysts. The next day, Finra suspended the firm, which has 300 reps. “These are major issues,” said one industry attorney, who asked not to be named. “Net capital and customer protection issues are big.” Facing such allegations, Jesup & Lamont could eventually lose its Finra' membership, the attorney said. In the first reports of the alleged net-capital violations, Finra on June 18 ordered Jesup & Lamont Securities Corp., the retail-securities unit of publicly traded Jesup & Lamont Inc., to cease conducting business other than liquidating transactions. At the time, however, Jesup & Lamont said it disputed Finra's action and was seeking its reversal. Later, it said it was cutting all staff except for a skeleton crew of workers. Alan Weichselbaum, Jesup & Lamont's CEO, did not return a call seeking comment.