A California broker-dealer Thursday said it bought most of Donahue Securities, including about 50,000 retirement and brokerage accounts.

        Many former brokers from Donahue Securities — displaced when federal regulators shut the firm down last week — already had signed up with Brecek & Young Advisors. The Folsom, Calif.-firm specializes in the same kind of retirement planning for nonprofit employees as Donahue had.

Discussing their purchase of Donahue Securities are Brecek & Young Advisors officials Matt Kelley, senior vice president (left); Ronald Brecek, president; and Christopher J. Ranney, executive vice president. (Jeff Swinger photo) | ZOOM |

        The $232,000 deal, reached late Wednesday, does not include, however, accounts with the Donahue FundSource. Trustees are hoping to raise at least $550,000 through its sale at an auction today in federal bankruptcy court. Operations of sister firm S.G. Donahue & Co. — such as third-party pension administration and a tax practice — also are still for sale.

        Federal court-appointed trustees are liquidating Donahue Securities in order to pay back 123 personal clients of the brokerage's former president. Federal authorities accuse Stephen G. Donahue of taking $6 million from those clients over 12 years.

        Remaining clients of Donahue Securities — including employees of area schools and hospitals who invest through payroll deduction — have been in limbo since the accusations resulted in a suspension of the firm's trading privileges, a freezing of all its assets and ultimately its closure.

        All client funds have been safe, as money actually is invested in other investment companies such as Kemper or Fidelity, with Donahue acting as a middleman. But access to those funds has been limited without the help of clients' advisers.

BRECEK & YOUNG

• Founded in 1996 in Folsom, Calif., near Sacramento.     • Led by Roland Brecek, Hal Young and Chris Ranney.     • Has more than $1 billion in assets under management.     • Awarded the 1999 and 2000 Broker/Dealer of the Year by Dow Jones Investment Magazine.     • Was a finalist in Arthur Andersen's Best Practices Award for “Exceeding Customer Expectations.”     • Recognized in Comstock's magazine as one of Sacramento's 10 Most Admired Companies.

        Such clients have to check with advisers or human resources departments for their individual status — but the sale of the accounts and the transfer of advisers to Brecek & Young is a giant step toward normalcy.

        “We want to provide the same level of service to their clients as they had in the past,” said Roland Brecek, president and CEO of Brecek & Young.

        But only about half of the 300 former Donahue advisers will go to Brecek & Young. As independent contractors, many have al ready signed up with other firms. Mr. Brecek said his firm did not accept all of Donahue's advisers.

        But because the deal reached Wednesday was for almost all client accounts, an account could be with Brecek while an adviser isn't. Mr. Brecek said transfering an account or changing advisers is seamless and without fees.

        “The client always has ultimate control over the account,” said Chris Ranney, executive vice president of Brecek & Young. “We want to calm the waters and encourage people not to do that. They need to meet with their financial advisers.”

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