WJB Shuts Brokerage Operation as Wall Street Firm Faces ‘Financial Issues’

By Laura Marcinek and Douglas MacMillan - Jan 4, 2012 4:50 AM GMT+0700

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.

The company was announcing new hires as recently as last month when WJB Capital said it added four equity analysts, including Bryan Maher and John Newman from Citadel Securities LLC, according to a Dec. 8 statement. The shutdown follows the collapse of MF Global Holdings Ltd., which filed for bankruptcy Oct. 31 after a wrong-way bet on European sovereign debt.

“Fortunately and unfortunately, 2011 is providing growing entrepreneurial firms like ours the opportunity to add more high-quality talent,” Rothfeld said in the December statement.

WJB Capital doesn’t hold client funds or assets, “so there’s no impact on customers,” said Michelle Ong, a spokeswoman for the Financial Industry Regulatory Authority. She declined to elaborate on reasons for the shutdown.

Conference Call

Employees were told of the closure today in a meeting in New York, with staff in branch offices listening on a conference call, Skolnick said. The firm has “no plans” to file for bankruptcy, said Skolnick, who didn’t have any information on severance packages.

WJB Capital, founded in 1993 with two agency brokers on the floor of the New York Stock Exchange, has offices in five U.S. cities and operates live trading desks for all the nation’s major equities and options exchanges, according to its website. The firm expanded from 10 employees to more than 100 in the past 10 years, according to the website. Eric Ryan, a New York-based spokesman for NYSE Euronext, declined to comment.

“Trading volumes are significantly down from the prior year, and the trend going into this year is also pointed downward,” said Richard Repetto, an analyst at Sandler O’Neill & Partners LP, the New York investment bank that specializes in financial firms. “For any broker, the current environment poses headwinds.”

Public brokerage records on the Finra website list nine owners and executive officers, including Rothfeld and founders Michael N. Romano and William J. Bonfanti.

To contact the reporters on this story: Laura Marcinek in New York at lmarcinek3@bloomberg.net; Douglas Macmillan in New York at dmacmillan3@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Tom Giles at tgiles5@bloomberg.net