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Twenty-five brokers in the securities and insurance units of troubled Continental Capital Corp. are moving out of the company's longtime headquarters in Sylvania.
They are to be independent contractors for an Iowa brokerage that has purchased the bulk of Continental Capital's business. Even though some brokers have moved to a Toledo location, where they have moved was unclear yesterday.
The Sylvania office, at 5580 Monroe St., eventually will be shuttered, a company spokesman said. The company said this month that it had 20,000 investment accounts and 200 representatives in 38 states.
Dwight Wheelan, president of financial services for Berthel Fisher & Co., of Marion, Iowa, said the Toledo brokers are independent contractors for his firm, which has 400 brokers across the country. Those brokers are permitted to choose their own business name or operate under the Berthel Fisher name, he said. “I know they've set up their own office but I haven't been there since they set it up. I don't know what the address is,” he said.
Berthel Fisher and Continental Capital had been in talks for 11 months and the deal was not affected by the recent troubles of Continental Capital's founder and chief executive officer, William C. Davis.
Mr. Davis was fired March 11 for allegedly forging the signature of a business associate on a loan document. He has denied any wrongdoing. He and Continental Capital are targets of lawsuits filed by clients and creditors, some alleging fraud. In an affidavit filed last week in U.S. District Court in Toledo, a federal postal inspector said he was conducting a mail fraud investigation involving Mr. Davis and Continental Capital.
“The brokers were with us before we knew anything about that,” said Mr. Wheelan.
Diana Pisciotta, a spokesman for Continental Capital, had only sketchy details about the brokers' move, saying she knew 25 registered brokers had moved furniture and personal effects from the Sylvania office to a new Toledo-area location. The Bryan office of Continental Capital Investment Services also is to close, with the brokers there working as independent contractors for Berthel Fisher. She did not know how many brokers were there. Clients, she said, should not be affected. Their records are secured, she added.
Although the securities and insurance units were the bulk of Continental Capital's operations, Ms. Pisciotta said she was uncertain how many employees remain or what they do. Four clerical workers at the Sylvania office's securities unit are to lose their jobs, she added.