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JB Oxford Seeks Sale of Its Last Business

August 17, 2004|Tom Petruno | Times Staff Writer

JB Oxford Holdings Inc., a Beverly Hills-based brokerage under investigation for its role in the mutual fund trading scandal, said Monday that it planned to sell its one remaining business.

The company said it was "actively seeking a buyer" for its unit that processes trades for other brokerages. In June Oxford agreed to sell its retail discount brokerage operation.

The clearing and discount brokerage units provide "substantially all" of Oxford's operating revenue, the firm said.

Oxford told its shareholders last year that it could face "substantial" penalties for its involvement in the fund scandal.

The company was named, but not charged, in New York Atty. Gen. Eliot Spitzer's Sept. 3 civil lawsuit against the hedge fund Canary Capital Partners. Spitzer said Oxford made after-hours fund trades for Canary.

Spitzer's investigation, and probes by the Securities and Exchange Commission and the Justice Department, are continuing.

If it succeeds with the sale of its two businesses, Oxford said Monday, it would "have cash to address its various legal matters ... and may identify potential new operations."

The company reiterated that it intended to "vigorously defend itself," and said it had "no plan of liquidation, nor is it the current intention of management to liquidate the company."

Oxford in June said it would sell its retail brokerage unit to Ameritrade Holding Corp. for as much as $26 million in cash.

Oxford also reported second-quarter results Monday. The firm said its brokerage and clearing operations had revenue of $3.96 million in the second quarter, down from $4.98 million a year earlier. Its overall net loss was $1.76 million, less than the $1.79-million loss of a year earlier. The per-share loss was 96 cents compared with $1.19.

Oxford shares rose 2 cents to $2.32 on Nasdaq before the company's announcement.

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