WJB Capital, a tiny broker dealer that was pushing to expand in the shadows of large Wall Street banks, has decided to close up shop after being unable to raise money from investors in recent weeks.
The decision comes amid a particularly difficult environment for Wall Street firms, especially those that specialize in sales and trading, a business that is contending with decreased activity and profits.
WJB’s decision has already prompted lawsuits from investors looking to recoup money.
James McNally claimed in a lawsuit in New York Supreme Court that WJB defrauded him of a $250,000 investment he made in December 2010. Mr. McNally also said WJB never paid him money as promised under the terms of the investment.
Craig Rothfeld, the company’s chief executive, said the complaint was without merit and that Mr. McNally provided the firm a loan, not an equity investment.
WJB’s closure came quickly and without warning. Just last month, the firm announced the hiring of four analysts to its equity research team, including staff from Citadel Securities, the now diminished investment banking operation of the hedge fund manager Kenneth C. Griffin.
“We were unable to raise capital in a manner that would have allowed the firm to continue its operations given the current climate and constraints that it would have placed on everyone involved with WJB,” Mr. Rothfeld said.
Bloomberg earlier reported news of WJB’s closure.