Well-known broker leaves Stockwalk for Dain
Eric Wieffering
Star Tribune
Published Nov 7 2001
Andrew O'Connell, one of the best-known members of the
Twin Cities financial community and a top broker at
Stockwalk Group Inc., has left the Golden Valley firm for RBC
Dain Rauscher.
O'Connell, 47, was joined by another broker and two trading
assistants. In 2000, the group generated $2 million to $3 million
in gross sales commissions, Stockwalk confirmed.
"Andy O'Connell is the prototypical hard-working sales rep,
and we're sorry to see him go," said Stockwalk spokesman
Matthew Kyler.
O'Connell, who did not return calls to Dain's office in
Wayzata, is the most high-profile broker to depart Stockwalk
since regulators took control of and began liquidating the
firm's stock-clearing division in late September after the
collapse of a risky stock loan.
Regulators prohibited Stockwalk clients from moving their
accounts until Nov. 1. Since then, the firm has lost a handful of
brokers and 750 to 800 of its 75,000 accounts, Kyler said.
The departure of O'Connell is a blow because Stockwalk's
future, as well as its ability to repay investors who purchased
$32 million worth of its commercial paper and about $16
million worth of convertible bonds, hinges almost entirely on
the performance of its brokerage division, Miller Johnson
Steichen Kinnard.
The unit, which consists of 350 brokers and a corporate finance
division, is the product of a merger of three firms: Miller
Johnson & Kuehn, R.J. Steichen and Kinnard Investments.
Only Steichen was consistently profitable before the merger,
and the combined entity has suffered big losses during the
current bear market.
In the 12 months ended March 31, the brokerage operation had
a pretax loss of $7.2 million on sales of $84.3 million. In the
three months ended June 30, the loss was $2.4 million on sales
of $24.1 million. Those losses did not include losses in the firm's
online unit, Stockwalk.com, which is for sale.
Stockwalk got into trouble with regulators in late September,
after its clearing unit, MJK Clearing, borrowed $125 million
worth of stock of a California company, GenesisInter media,
from Native Nations Securities Inc., a New Jersey brokerage.
Regulators stepped in after the price of Genesis Intermedia
plunged and Native Nations was unable to make a $117 million
payment to MJK Clearing.
Stockwalk since has closed some offices and laid off traders and
research analysts. But CEO Dave Johnson, himself a top
broker, has boosted commissions and reduced or eliminated
some charges in order to limit defections from Stockwalk's
sales force.
O'Connell had been a broker with Kinnard Investments since
1978 and joined its board in 1994. At the time of the sale to
Stockwalk, he was the third-largest Kinnard shareholder
among employees, with about 125,000 shares.
-- Eric Wieffering is at ewieffering@startribune.com .
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