The Los Angeles County Superior Court issued a temporary restraining order Wednesday against the Long Beach investment adviser F. G. Smathers & Co., two days after state authorities had accused the firm of not notifying officials that a controlling stake had been transferred to a company run by a convicted forger.
The order, according to the California Department of Corporations, has the effect of preventing the firm from collecting its customary quarterly advance fees from its clients.
Smathers collected about $175,000 in advance fees last quarter and about $400,000 this year, the court was told.
Files for Chapter 11
The company filed a petition under Chapter 11 of the bankruptcy law in U.S. District Court on Tuesday, a day after the Corporations Department filed a complaint against it and its owner, Frank G. Smathers, in Superior Court.
Judge Warren Deering set Oct. 6 for a hearing on the suit.
The complaint alleges, among other things, that Frank Smathers did not notify the state that he had entered an agreement 18 months ago to transfer 85% of his company's stock to Indemnity Federal Financial Corp., whose president, Peter Messineo, had been convicted of forgery.