Jesup & Lamont Inc. announced it would terminate all non-essential personnel and stop paying nearly all salaries about a week after the small investment bank and brokerage firm received a notice to stop making trades.
Shares slumped one-third to 4 cents in recent trading. The stock has lost 91% of its value this year.
Last week, the Financial Industry Regulatory Authority ordered the broker-dealer to stop trading, except for liquidations, because of its securities subsidiary's capital deficiency. The company said it was taking steps to regain permission to restart transactions.
But the company's announcement on Tuesday seemed to suggest those efforts were so far unsuccessful. Jesup & Lamont did note that it "continues to engage in dialogue with Finra with respect to compliance with the net capital rules."
Except for the continuation of salaries to a limited staff, Jesup & Lamont said all salaries and draws have been terminated. All remaining officers will report directly to the company's audit committee.
Chief Executive Alan Weichselbaum will remain at the company, while former Executive Chairman Steven Rabinovici will remain as a non-executive chairman of the board. Both will remain at the company on a non-salaried basis.
Chief Financial Officer William Holub will oversee the financial affairs of the parent. Mark Wilton, meanwhile, has resigned from the board for health reasons while Donald Wojnowski resigned for personal reasons.
Founded in 1877, Jesup & Lamont began as a partnership formed by two financiers--James Jesup and Lansing Lamont. The Rockefeller Center complex in New York was constructed with funds partially underwritten by the firm. The firm most recently had 125 brokers and 200 total employees.
