Posted On: June 25, 2007
Son of Brookstreet Founder Joins Wedbush Morgan Securities and Invites Brookstreet Brokers to Join Him
First announced on this Blog last week was news of problems at Brookstreet Securities. Midweek, the firm then reported that “disaster” had struck because CMOs owned by the firm and its clients had been marked down in price and margin calls had caused the firm to reach the brink of failure. On Friday, Brookstreet closed for business.
Over the weekend we heard a rumor, not confirmed, that Scott Brooks, the son of Brookstreet founder Stanley Brooks, had joined Wedbush Morgan Securities of Los Angeles and invited the Brookstreet brokers to do the same. That rumor was confirmed today in news reports.
Brookstreet’s brokerage business was conducted through independent contractor brokers similar to giant Linsco Private Ledger and other firms. Before now, Wedbush Morgan did not have an independent contractor brokerage arm, as do other firms including Raymond James Financial, Inc.
It is reported that Scott Brooks, the former executive vice president of Brookstreet, will “substantially build and staff” that part of the business. “I understand that you have options,” he told the reps in an e-mail. “I believe this is an optimal solution for you.”
2 comments:
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TD
I am a Brookstreet broker and have been for about a year. Brookstreet was by far the best broker dealer I have every worked for. I have been with wirehouses as well as independents. The experience I had with Brookstreet was similar to many other registered reps. I honestly would have never left Brookstreet unless I was forced to as recently happened. Brookstreet was the most supportive firm while allowing brokers freedom to do what they thought was best for clients. Considering how great Brookstreet was many registered reps including myself were completely blindsided by recent events. It just goes to show that you should always keep your options open and that there is an important place for regulation in the investment industry since there are greedy people everywhere, even where you don't suspect them.
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