Stifel Settles Structured Notes Case with $850K Payment
Stifel Financial recently reached a settlement involving structured notes, paying $850,000 to resolve an arbitration claim. This payment is part of a broader legal situation linked to Chuck Roberts, a former Stifel broker who was barred from the financial industry in July for selling unsuitable investments.
Background of the Case
The current settlement adds to a series of arbitration awards against Stifel. In March, the firm faced a significant arbitration ruling, resulting in an award of nearly $133 million. Stifel has since filed a motion to vacate this award and is awaiting the outcome.
Financial Impact
To date, Stifel has paid close to $182 million in settlements and arbitration awards related to Roberts’ activities. The firm is currently dealing with 23 ongoing arbitration cases. These pending cases primarily involve allegations of misrepresentation of structured notes and the unsuitability of products sold to clients.
Future Considerations
The circumstances surrounding these settlements may influence Stifel’s strategic decisions. Sources within the investment banking industry have indicated that these legal challenges could prompt Stifel’s executives to expedite the sale of their remaining business units. Notably, discussions about Raymond James as a potential buyer have emerged.
Executive Statements
In response to inquiries about potential sales, Stifel CEO Ron Kruszewski remarked, “I don’t think Raymond James would sell to us, but if that ever changes, I’d be interested.” Despite reports suggesting a sale, Kruszewski has publicly denied that Stifel is in negotiations with Raymond James.
Additional Business Moves
In the same month, Stifel announced plans to divest its independent advisor channel. This business unit encompasses approximately 110 advisors and manages about $9 billion in client assets, and will be sold to Equitable.
- Settlement amount: $850,000
- Total arbitration awards related to Roberts: Nearly $182 million
- Pending arbitration cases: 23
- March arbitration award: Close to $133 million
- Independent advisor channel: Approximately 110 advisors, $9 billion in assets
As Stifel navigates these challenging waters, the decisions made in the coming weeks could shape the future of the firm significantly.
