Lighthouse Financial, a mini-prime broker based in New York, has suspended trading activities until further notice.
Lighthouse Financial Group, founded in 1999, launched Lighthouse Prime Services in 2009.
One industry participant said the firm had been in trouble for some time.
According to FINalternatives, the firm has stopped paying staff and told clients they could only sell assets through the firm. Another source mentioned that a boutique player was making a bid for the firm.
The mini-prime also has linked to troubled UK firm Caparo. Owned by Labour peer Lord Paul and run by his sons Akash, Ambar and Angad, the group manages a variety of industries from the design, manufacture and marketing of steel, to hotels, media and financial services.
In January 8 2010 Lighthouse issued a press release claiming an Investment Partnership with Angad Paul, CEO of Caparo. “With Angad based in London, it makes it easier for us to execute on our vision of being operational in the UK in 2010,” said Christopher Foxall, partner and head of the Global Portfolio Trading Division at Lighthouse Financial.
However recent reports suggest that Caparo has also run into financial difficulties. The Daily Mail said that Caparos auditor, BDO, had called the group’s ability to continue as a going concern, after Caparo broke the terms of its bank loans. Lord Paul dismissed the claims as politically motivated. The London office of Lighthouse Financial is yet to be launched.
The group is run by Jeffrey J. Morfit, founding partner, chief executive officer and senior managing director of Investment Banking Division.