Mass Layoffs at Jesup & Lamont Amid Calls for Brokerage to Cease Business
Jesup & Lamont, a 133-year-old brokerage, said it will terminate all but a limited number of staff members who will continue to draw salaries. CEO Alan Weichselbaum and non-executive chairman Steven Rabinovici will remain on board but forgo their salaries, the company said.
Plan to Get Back Into Compliance
The drastic measures come as the Financial Industry Regulatory Authority, FINRA, instructed the company on June 18 to cease its securities business, citing its failure to meet net capital requirements. Jesup and Lamont said it plans to reduce its costs and develop a strategic game plan to push it back into compliance.
As part of the FINRA directive, the firm's Jesup & Lamont Securities subsidiary laid off its 300 representatives, according to a report on InvestmentNews.com. Jesup & Lamont are also required to only engage in transactions that involve liquidation.
In addition to its capital woes, Jesup & Lamont is also facing scrutiny by the Securities and Exchange Commission over its sales of stock to clients while allegedly leaving them hanging with no shares after the sale, according to a report in the Boston Globe.
The company says it continues to hold discussions with FINRA regarding its compliance with the net capital rules.