GunnAllen was shuttered Monday by FINRA for net capital violations but client money will be safeguarded, a source close to the situation said.

The industry regulator had warned Tampa, Fla.-based GunnAllen last week that it needed a capital infusion over the weekend in order to stay in business. When no capital infusion was forthcoming, the regulator closed the broker-dealer.

The source said that clients’ money is not at risk because GunnAllen’s clearing firm, Ridge Clearing & Outsourcing Solutions, will take over the accounts. But the firm’s 400 employees are out of a job.

FINRA said that whenever a company is closed, it conducts an investigation. But a spokesman would not confirm whether there was an investigation underway.

GunnAllen has had its ups and downs over the years. After enjoying a high-growth period over most of the past decade, it was on the verge of bankruptcy late last year when Chairman John Sykes abruptly resigned from the board, along with several other board members, raising questions about the future of the company. Sykes was also the company’s largest shareholder, after buying a controlling stake in September 2008.

The company also faced problems stemming from investor lawsuits seeking as much as $50 million in damages, the source close to the investigation confirmed. Many of those lawsuits stem from clients who claim they were steered to a Ponzi scheme that collapsed in 2007.

GunnAllen could not be reached for comment.