WJB Capital and its chief executive officer, Craig Rothfeld, were accused of fraud and breach of contract by an individual who said he made a $250,000 investment in the company, according to a complaint filed Dec. 31 in New York State Supreme Court in Manhattan.
The plaintiff, James McNally, said in his complaint that he was promised “compensation for the duration of the investment.” WJB Capital failed to pay and used the money “for fraudulent purposes,” according to the complaint.
Rothfeld said in a phone interview that McNally provided an eight-year, $250,000 loan to the firm, not an equity investment, and received monthly interest.
“We deny the allegations,” Rothfeld said about McNally’s complaint. “They are baseless and without merit.”
An attorney for McNally didn’t reply to a message seeking comment.
WJB Capital voluntarily ceased broker-dealer operations today, Rothfeld said. The company was “unable to raise capital in a manner that would have allowed the firm to continue its operations given the current climate and the constraints that would have been placed on everyone,” the CEO said
“Everybody knows Wall Street is a difficult environment,” Rothfeld said.
Mark Skolnick, a lawyer at Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow LLP and WJB Capital’s general counsel, said the company has some non-brokerage operations and is exploring “other possibilities.”
WJB Capital, founded in 1993 with two agency brokers on the floor of the New York Stock Exchange, has offices in five cities across the U.S. and operates live trading desks for all the nation’s major equities and options exchanges, according to its website. The New York-based company expanded from 10 employees to more than 100 in the past 10 years, the website says.
The case is McNally v. WJB Capital Group Inc., 650005-2012, New York State Supreme Court (Manhattan).
To contact the reporter on this story: David McLaughlin in New York at firstname.lastname@example.org