Pacific West to Close Doors
Another broker/dealer is closing up shop. Pacific West Securities will make its exit 2012, joining some 20 other broker/dealers that have shuttered in the past two years. The reasons for the mass exodus vary, but many B-Ds have been forced to shut down because of legal costs related to investor lawsuits over failed private-placement deals in Medical Capital Holdings and Provident Royalties LLC.
Pacific West, which has about 300 reps and financial advisors, did not sell those products, according to CEO Tony Pizelo. The firm has, however, faced a number of investor complaints and arbitration lawsuits in the past two years. According to the Financial Industry Regulatory Authority’s Broker Check Web Site, Pacific West Securities has lost nearly $1 million in FINRA arbitration awards since 2009.
In one investor award, causes of action cited against Pacific West included breach of fiduciary duty, misrepresentation and unsuitability.