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State | HEARD ON THE BEAT / INVESTMENT BANKING

JB Oxford Seeking a Partner

Beverly Hills Brokerage Is Subject of Federal Probe

March 03, 1998|DEBORA VRANA | TIMES STAFF WRITER

JB Oxford Holdings Inc., the beleaguered Beverly Hills discount brokerage firm currently under investigation by federal authorities, has been looking for a buyer or a partner, sources said.

But JB Oxford executives said Monday that there are no imminent deals.

"The board is not currently considering any offers for the company," said Stephen Rubenstein, chairman and chief executive officer of JB Oxford.

Still, sources say the publicly traded firm has searched for new shareholders or a merger partner in the wake of continuing investigations by the Securities and Exchange Commission and the U.S. attorney's office. Neither would comment on the status of any investigation.

Possible acquirers include a group of Asian or European investors, sources said.

Last fall, Los Angeles financier Wayne Rogers, who portrayed Trapper John on the television show "MASH," brought the brokerage firm to the attention of another Los Angeles investment bank.

"He tried to show it to us, but they are more equity-oriented and we are more debt," said Jason W. Reese, president of Beverly Hills-based Imperial Capital, a subsidiary of Imperial Credit, a publicly traded diversified financial services company. The company's board decided not to pursue an acquisition after discussion at a board meeting. "It wasn't a good business fit," said Reese.

Rogers, who confirmed he owns a small amount (less than 1%) of JB Oxford's outstanding shares, appeared in television commercials in 1997 advertising JB Oxford's brokerage services. He is not under contract to be JB Oxford's investment banker, company officials said.

Rogers was once affiliated with Dabney Resnick Inc., the predecessor to Imperial Capital and once had his own office in Dabney Resnick's offices.

The investigation into JB Oxford centers on the activities of its consultant Irving Kott, a convicted securities swindler. The company said it terminated its consulting arrangement with Kott in September 1997. His son, Ian Kott, is currently the company's chief operating officer.

On Aug. 19, FBI agents raided JB Oxford's Beverly Hills office and seized boxes of files. JB Oxford executives say they are cooperating with the investigations.

A purchase of a JB Oxford stake by Asian investors would fit with the brokerage's recent strategy to target the growing Asian populations of Los Angeles and other major cities. In Southern California, the firm has launched advertising campaigns in Chinese, Korean and Japanese to appeal to investors who want to pay the lowest commissions when they buy and sell stock. It also added brokers who speak those languages.

Two years ago, JB Oxford discussed a joint venture with one of Taiwan's largest broker-dealers.

JB Oxford's stock has taken a beating in recent months, in part because of the investigations. JB Oxford shares rose 3 cents to 75 cents a share on Nasdaq on Monday. The stock has fallen from a 52-week high of $2.56.

*

Debora Vrana can be reached at debora.vrana@latimes.com

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