The Investment Industry Regulatory Organization of Canada (IIROC) has terminated the membership of Toronto-based Edgecrest Capital Corp., the self-regualtory organization announced on Tuesday.
IIROC suspended Edgecrest in September, after the firm suffered a growing capital shortfall that it could not resolve. The firm consented to the suspension order, and to the ultimate termination order.
Edgecrest joined IIROC in September 2013, and was headed by David Beatty as its chairman and CEO. In 2014, Edgecrest acquired Toronto’s Stonecap Securities Inc. in an effort to build scale among the struggling boutique investment dealers.
However, the firm ran into capital trouble in Janaury of this year, and IIROC imposed a number of restrictions on Edgecrest’s operations. The firm reported a capital shortfall again in May, and subsequently cut salaries, and suspended employee expense accounts and client trading.
Edgecrest was able to find the financing to remedy the shortfall in May, but by August it was in capital trouble once again, according to IIROC, “as a result of cumulative monthly operating losses.”
At that point, the firm advised the regulator that it was unable to correct the capital deficiency, all of its staff were let go, and it began the process of resigning its membership with IIROC.