MuniCorp to Cease Trading Due to Losses

MuniCorp of California Inc., ranked as the state’s 25th-largest brokerage house and among the biggest in municipal bonds offerings, said Sunday that it expects to cease all trading on Wednesday and will close all five of its offices by April 30.

The Woodland Hills-based firm, which executives estimate has lost nearly $2 million over the past 1-1/2 years, has seen its staff of brokers cut almost in half during that period.

“We’re a dinosaur,” said Kenneth W. Rogers, chief executive and co-founder of the 18-year-old firm. “Not many firms are left that have this kind of specialty. We’re becoming extinct,” he said in a telephone interview Sunday.

The company’s estimated 44,000 clients--the majority of them individual California investors--will not be affected, Rogers said. Virtually all will continue to deal with their MuniCorp brokers once the brokers have joined new firms, he said. The investments themselves are unaffected, he added.

Many of the brokers, including Rogers, have been retained by a St. Petersburg, Fla., brokerage, Raymond James & Associates. Rogers said he will likely open a Woodland Hills branch for the brokerage Robert Thomas Securities, which is owned by Raymond James.

Rogers pointed to recent trends that led to the demise of his company. Using “up-front” bonuses of $100,000 and more, large rivals such as Prudential-Bache Securities and Paine Webber have lured away a number of brokers.

Also, Rogers said, the October, 1987, stock market crash and the Tax Reform Act of 1986 have made municipal bonds less attractive.