About 270 registered reps and advisers are scrambling for a new broker-dealer to park their licenses after being notified just yesterday that their firm — Colonial Brokerage Inc. — will be shut down in November, according to sources both inside and outside of Colonial.
About 270 registered reps and advisers are scrambling for a new broker-dealer to park their licenses after being notified just yesterday that their firm — Colonial Brokerage Inc. — will be shut down in November, according to sources both inside and outside of Colonial.
Colonial Brokerage is the retail brokerage arm of Colonial BancGroup Inc. Last month, BB&T bought Colonial Bank in a deal that was assisted by the Federal Deposit Insurance Corp. BB&T, however, did not acquire Colonial BancGroup, the holding company that owns the brokerage unit.
Colonial Bank failed because of bad loans to real estate developers in Florida and Las Vegas, according to published reports.
BB&T told the firm's brokers yesterday that it would not purchase the assets of Colonial Brokerage, and that effectively ends the firm's existence, multiple sources said.
“The situation got pretty tenuous pretty quickly,” said one source with Colonial Brokerage, who asked not to be identified. The brokers are now all trying to find new firms, the source added.
Colonial Brokerage has clearing agreements with Pershing LLC, National Financial Services LLC and Fiserv Inc., according to the Financial Industry Regulatory Authority Inc.
Daniel Overbey, president and chief executive of Colonial Brokerage, did not return calls seeking comment.
