Another Brokerage Firm Bites The Dust

Investment News reported that QA3 Financial Corporation has shut down effective February 11, 2011. QA3 has been a leading seller of Regulation D private placements to Texans, including Medical Capital Holdings and Provident Royalties. The firm has been under the gun for some time now and will join roughly twenty-four other brokerage firms that have shuttered the doors over the past year.

With looming claims from the sale of private placements, the company has previously claimed that bankruptcy was a possibility due to a dispute with its insurance carrier, Caitlin Specialty Insurance. With $7.5 million in legal claims and expenses, the insurance company has said that the amount of coverage is capped at $1 million. In an email sent out on February 4th to brokers at the firm, Steve Wild, CEO of QA3, wrote: “In light of the arbitration award rendered against QA3 on January 14, and the fact that our errors and omissions carrier has not yet provided coverage set forth in our policy, we have made the difficult decision to cease conducting business on February 11.” The arbitration award mentioned in the email was for an elderly couple with limited investment experience who invested in a tenants-in-common exchange (TIC), see (FINRA# 09-05542; Arthur R. Cargill and Mary Ann Cargill v. QA3 Financial Corporation).

If you have suffered losses in private placement offerings, please contact our securities law firm at 1-800-259-9010 for a confidential, no obligation consultation.

contact us for a free consultation
Free Consultation: (800) 259-9010