Investor Group to Buy Control of JB Oxford

A Tennessee investor group said Wednesday that it has agreed to pay $6 million to buy a controlling interest in JB Oxford Holdings, a beleaguered Beverly Hills discount brokerage company that is under investigation by federal authorities.

Publicly traded JB Oxford has been looking for new investors since August, when its office was raided by FBI agents. The federal investigation is said to be centered on the activities of Irving Kott, a a convicted securities swindler who had a consulting agreement with JB Oxford.

The investor group is led by Christopher L. Jarratt, principal of Nashville-based merchant banking firm Third Capital. Jarratt has focused mostly on real estate companies and in December bought a 10% stake in what was once one of the largest real estate developers in Orlando, Fla.

Jarratt, 36, would become chairman and chief executive of JB Oxford, replacing Chairman Felix A. Oeri and CEO Stephen Rubenstein, who would remain as president of the brokerage subsidiary.

“We believe JB Oxford is a good company with good employees and a healthy customer base,” said Jarratt, who noted that JB Oxford is the first finance company his group has purchased. “It suffered some unfortunate setbacks recently, and our immediate goal is to put these problems behind us.”

As part of the deal, which would give the new investors a 47% stake in the company and control of the company’s board, $4 million would be used to buy out Oeri.

It is unclear what role Irving Kott’s son, Ian, the company’s current chief operating officer, would have at the company.

The deal is expected to close by June 8. JB Oxford shares rose 16 cents to close at $1.31 on Nasdaq.