People Moves
GunnAllen Brokerage Team Quit To Join New Independent Firm
A large branch of GunnAllen Financial, the Florida-based firm recently shut down due to its failure to meet net capital requirements, has left to work at a new independent broker-dealer, Aegis Capital Corp., according to Investment News.
The branch, located on Wall Street, is in the process of moving about 60 brokers to Aegis, the publication said. This branch oversees up to $500 million in assets under management, it said.
The branch, which does business as RG Michals Holdings Inc., produced between $10 million and $12 million per year in fees and commissions while at GunnAllen, the publication added, citing industry sources.
The Financial Industry Regulatory Authority Inc has shut down GunnAllen because it failed to meet its net-capital requirements, reports said. The firm is no longer permitted to trade in its client accounts and the assets continue to be held by the firm's third party custodian. A total of about 400 reps and advisors worked at the firm. An issue for the staff is finding an independent broker-dealer that uses its clearing firm, Ridge Clearing and Outsourcing Solutions.
On GunnAllen’s website is a message that reads: “Our Business Continuity Plan is designed to permit our firm to resume operations as quickly as possible, given the scope and severity of the business disruption.”
It continues: “The plan calls for the routing of phone calls, trades, faxes, and mail to an alternate (out of state) GunnAllen Financial location. Business is intended to be reinstated within a short period of time, allowing customers to access funds, place trades, make deposits, and inquire about their account(s).”
“During this period of time, GunnAllen will be in the process of getting an alternate site set up with mission critical systems, data back up and recovery, policies and procedures, and employees in order to resume business within a reasonable time after the business disruption,” it says.
GunnAllen is reportedly facing a raft of investor lawsuits related to the activities of former GunnAllen adviser Frank Bluestein, who allegedly operated a $250 million Ponzi scheme.