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Lazard Capital Markets Not Planning Shutdown

Stocks in this article: LAZ

Updated to clarify Lazard equity investment and additional public disclosures.

NEW YORK ( TheStreet) -- Independent broker dealer Lazard Capital Markets doesn't have plans to shut itself down, as the firm continues with a strategic review that could yield a sale, management buyout or capital partnership.

Lazard Capital Markets has made "no decision" on its strategic review, Scott Sunshine, a spokesperson for the company, said in a telephone interview. Sunshine did say that the firm has "no plans to shut down."

Those comments conflict with reports from Fox Business News reporter Charlie Gasparino that executives at the firm are scrambling to find new jobs amid speculation the firm could be closed.

"FBN NEWS: execs at lazard capital mkts scrambling to find new jobs as speculation swirls of imminent sale, MBO or shutdown co not commenting," Gasparino wrote on Twitter late on Thursday.

It has been six months since Lazard Capital Markets confirmed its strategic review and Sunshine, the company spokesperson, could give no detail on possible bidders or equity partners for the firm. Sunshine said there is no current timetable on the strategic review. He called it a "continuing process."

The fate of Lazard Capital Markets could be a telling sign into the health of independent broker dealer businesses, which once had a far larger presence on Wall Street.

In recent years, firms such as Ticonderoga Securities, Pali Capital and Kaufman Bros. have all closed shop, amid a decline in the profitability of brokerage and research services.

Lazard Capital Markets, however, has a unique pedigree. The company was spun out of famed financial advisor Lazard Freres & Co (LAZ) when the firm went public in 2005. Lazard Capital Markets is also the capital markets partner of Lazard Freres for a wide range of activity outside of advising corporate clients.

The firm's activities include research, sales & trading, and the underwriting of equity, fixed income and convertible securities.

Lazard Capital Markets "generally underwrites and distributes U.S. securities offerings originated by our Financial Advisory business in a manner intended to be similar to our practice prior to the separation, with revenue from such offerings generally continuing to be divided evenly between Lazard Group and LFCM Holdings," Lazard Freres & Co. said in its most recent annual filing with the Securities and Exchange Commission.

Lazard Freres & Co. also licenses its brand name to Lazard Capital Markets and an alternative investment fund given the "over 160 years of heritage, connoting, we believe, world-class professional advice, independence and global capabilities with deeply rooted, local know-how," tied to the Lazard name.

Both firms are headquartered at 30 Rockefeller Center. Lazard Capital Markets began 2013 with a staff of about 200 employees, Bloomberg reported in March.

Lazard Freres & Co. has no equity investment in Lazard Capital Markets after the 2005 spinoff, however, public filings indicate an ongoing relationship between the two firms.

Lazard Capital Markets "is owned by various current and former working members, including certain of Lazard's current and former managing directors (which also include the Company's executive officers) who were or are also members of LAZ-MD Holdings," Lazard Freres & Co. said in the filing.

Those filings also disclose payable and receivables between both firms related to administrative and support services.

-- Written by Antoine Gara in New York.

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