Legal problems tied to private placements sales in Medical Capital Holdings and Provident Royalties have proved to be the undoing for yet another broker/dealer. Last week, CapWest Securities announced it had filed withdrawal papers with the Financial Industry Regulatory Authority (FINRA).
As reported Sept. 4, by Investment News, CapWest’s profile status with both FINRA and the Securities and Exchange Commission (SEC) is no longer “active.” Instead, it’s listed as “termination requested.”
Representatives for CapWest sold $22 million in private placements issued by Provident Royalties and $30.6 million of Medical Capital notes. Both companies were charged with fraud by the SEC in 2009.
The closing of CapWest comes on the heels of several other broker/dealer closings over private placement deals gone bad, including GunnAllen Financial, Jesup & Lamont Securities Corp. and QA3 Financial Corp.
Earlier this year, CapWest lost a $587,000 FINRA arbitration claim to four clients who claimed negligence and misrepresentation in the sale of oil and gas ventures offered by Provident and Striker Petroleum LLC.
CapWest is owned by Capstone Financial Group.