Stifel Nicolaus & Co. Review – Broker Fraud, Lawsuits and Regulatory Actions
The White Law Group is investigating potential securities claims involving Stifel Nicolaus & Co. (CRD#: 793) Stifel, a broker-dealer and investment banking firm, is headquartered in St. Louis, Missouri. Stifel reportedly has 191 disclosure events on its broker record including 133 regulatory events, 2 civil events and 4 arbitrations.
FINRA Hits Stifel $3.6 million in sanctions for sales of UITs
May 2020 – FINRA fined Stifel $1,750,000; and ordered it to pay close to $1.9 million in restitution to about 1,700 customers for failing to supervise recommendations to roll over their UITs before they matured. FINRA says that the transactions were potentially unsuitable and allegedly caused the customers to incur sales charges they wouldn’t have had to pay had they held onto the investments for the full term.
Between January 2012 through December 2016, Stifel purportedly executed about $10.9 billion in UIT transactions, of which about $935.2 million were rollovers occurring more than 100 days from their maturity date. FINRA alleges that Stifel also sent about 600 letters to customers purportedly misleading them about the costs of UIT rollovers, or “switches.” Those communications understated the cost of the switch by close to 49%, according to the Letter of Acceptance Waiver and Consent (AWC).
FINRA Lawsuit: Stifel Client Alleged Unsuitable, Unauthorized, and Excessive trading
February 2020 – A FINRA panel ordered Stifel Nicolaus to pay $500,000 in compensatory damages to a client after she filed a complaint alleging unsuitable, unauthorized, and excessive trading.
The customer reportedly claimed that her advisor, John Raymond Lisowski, while employed by Stifel, purportedly mishandled her account by failing to recommend and implement a suitable investment strategy or appropriate asset allocation, including allegedly over-concentrating her account in General Electric, Range Resources and U.S. Steel Corporation securities.
The claim further alleged that Lisowski placed unauthorized option trades, engaged in excessive trading and invested her funds in unsuitable securities, reportedly causing her to incur substantial damages.
The FINRA panel found that Stifel and Lisowski, who were both named as respondents in the customer’s action, were “jointly and severally liable” in the case.
FINRA Lawsuit: Customer Complaint against Stifel Nicolaus for Alleged supervisory failures
October 2019 – A FINRA arbitration panel ordered Stifel Nicolaus to pay $1.5 million to three Baltimore, MD customers who alleged the firm failed to properly supervise a broker who sold them biotechnology and healthcare stocks.
The clients alleged that broker Kenneth D. Blumberg invested as much as 80% of their portfolio in fewer than 10 biotech stocks, according to an award issued on October 3, 2019. The investors originally requested $38 million in damages before making their final $1.5 million claim. According to the complaint, the account dropped $1.8 million between 2015 and 2017.
Stifel Pays $2.7 Million to Settle SEC Charges
September 2019 – Stifel agreed to pay $2.7 million to settle charges for providing incomplete and inaccurate securities trading information to the SEC.
Broker-dealers are required to provide the information known as “blue sheet data,” which the SEC uses to carry out its enforcement and regulatory obligations, including investigations of insider trading and other fraudulent activity.
The SEC found that Stifel failed to report data for approximately 9.8 million transactions and provided inaccurate information for approximately 1.4 million transactions. The firms admitted the findings in the SEC’s cease and desist order and agreed to be censured in addition to the $2.7 million penalty.
Investigating Potential Claims
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
Free Consultation with a Securities Attorney
The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.
If you have concerns regarding investments you purchased through Stifel Nicolaus & Co. Services and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.