Sands Brothers and Co. is an investment company founded by two brothers who catered to wealthy investors but started having problems along the way. Over the years, the investment firm has been bombarded with arbitration claims that range from negligence to conducting unauthorized trades, and some of them got good compensations. However, the company offered lowball settlements, claiming that it did not have enough funds to pay all the claims coming from investors.
During the legal battle with investors, the Sands Brothers withdrew its membership from the NYSE, meaning it could not be compelled to stick to settlements. 18 months later, it withdrew as a broker-dealer, which served to alarm investors the more. Another delay tactic that the investment firm used was to appeal settlement awards, which prolonged the final decisions. I see the sense in the Sands Brothers not being able to pay all the claims but engaging in such tactics does not do much to help its reputation.
One fear that a majority of investors shared was that Sands Brothers would avoid paying out settlements by moving its assets to Laidlaw and Co UK, which has long been affiliated with the investment firm. Laidlaw and co UK is based out of London but is listed with NASD with its mailing address the same one as that of the Sands Brothers, not to mention it lists Martin and Steven Sands as investment advisers and directors at Laidlaw.
The company that operated in 48 US states at the time said that it was not a Sands Brothers successor, so investors didn’t have to worry about hidden assets. Under the leadership of Matthew Eitner and James Ahern, Laidlaw has had more than a few cases of irregular conduct, especially when it comes to US financial laws, which I believe is not something that should happen in a firm that has been operating for decades.