Meredith Whitney Appears to Be Trading Brokerage Firm for Investment Fund

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Meredith Whitney rose to fame with her prediction in 2007 that Citigroup would be forced to cut its dividend.Credit Danny Moloshok/Reuters

Meredith A. Whitney appears poised to leave the industry that lifted her to fame.

The brokerage arm of the Meredith Whitney Advisory Group deregistered from Finra, the securities industry’s self-regulatory body, on Aug. 28, according to a filing.

As Bloomberg News points out, the firm’s most recent research report — “MWAG Weekly: FOMC Refrains From Tapering, The Punch Continues to Flow” — was published on its Web site on Sept. 19.

The termination of the firm’s brokerage license comes after a rocky period for the onetime star analyst, who shot to fame with her prediction in 2007 that Citigroup would be forced to cut its dividend. When the embattled bank did just that, she began to collect accolades as a kind of psychic and was celebrated as a wise woman of the markets. Michael Lewis once dubbed her “the closest thing Wall Street has to an oracle.”

The success that her Citigroup call created prompted Ms. Whitney to strike out on her own in 2009, founding a research and brokerage firm. Her first big prediction since then — made on “60 Minutes” — was a wave of municipal bond defaults, spanning from 50 to 100 issues.

That call drew criticism across Wall Street, with skeptics arguing that Ms. Whitney did not understand the basic structure of municipal bonds. Though Ms. Whitney said her prediction was based on “a guesstimate,” she hasn’t backed down.

In fact, she published a book earlier this year, “Fate of the States: The New Geography of American Prosperity,” arguing that coastal states would struggle while interior ones would benefit from booms in oil and gas production and manufacturing. And she wrote in The Financial Times in July that a Detroit bankruptcy would portend a number of other bankruptcy filings by municipalities.

All the same, Ms. Whitney seems poised to move onto her next venture. According to Finra records, Ms. Whitney is the managing principal of Kenbelle Capital, a “long/short” fund. And according to a legal notice published in The Royal Gazette, Bermuda’s main newspaper, Kenbelle Capital has applied for a permit to “engage in or carry on trade or business in Bermuda.”

A representative for Ms. Whitney was not immediately available for comment.