Stifel Nicolaus & Company to Pay $3.2 Million
According to the Massachusetts Secretary of the Commonwealth William Galvin on May 1, Stifel Nicolaus & Co. will pay a $2.5 million fine and $700,000 in customer restitution over alleged “predatory” sales practices by one of its former brokers, Joseph Crespi. Stifel, Nicolaus, & Company, Inc., is an independent broker dealer registered in Massachusetts (CRD No. 793).
Stifel agreed to pay in customer restitution to those clients who were charged more than 5% commissions on equity transactions.
According to the complaint Stifel Nicolaus & Company allegedly ignored a series of red flags that “elderly Massachusetts residents, non-profit organizations and churches were being charged excessive and unauthorized fees.”
Unauthorized Trades, High Commissions
Crespi allegedly made unauthorized trades in multiple client accounts, bringing in high commissions, according to the complaint. In one case, a trade was reportedly made on behalf of a deceased client. In another case, a nonprofit’s account generated more than 4% in fees and commissions for the Crespi and Stifel Nicolaus.
According to the complaint, Crespi’s alleged actions triggered Stifel’s internal alerts system numerous times. He allegedly sold a long-term unit investment trust less than a year ahead of its maturity and also purported sold a client’s mutual fund shares with a 4.24% front-end sales charge less than two months after buying them.
According to his FINRA BrokerCheck report, Joseph Crespi was reportedly registered with Stifel Nicolaus in Taunton, Massachusetts from 2018 until February 2022. He reportedly worked briefly at Ameriprise until he “resigned after notification that he was suspended pending an internal review of his conduct related to acting outside the scope of his duties.” Crespi is not currently registered as a broker. He has three customer complaints on his record.
Stifel Nicolaus Recent History of Disciplinary Actions
Stifel Nicolaus has been the subject of several regulatory actions over the past five years concerning its failure to supervise employees or deficiencies with its internal controls and has paid over $14 million dollars in fines, civil penalties, disgorgement of profits, and restitution to customers.
On December 19, 2018, Stifel allegedly failed to supervise representatives of a Massachusetts branch who charged Massachusetts advisory clients over $1,000,000 in commissions from 2012 through 2017. Stifel paid a fine of $300,000 and make written offers of remuneration to the harmed customers.
On March 31, 2021, Stifel reportedly agreed to more sanctions when it allegedly failed to supervise a broker-dealer agent who recommended unsuitable and over-concentrated investments in precious metals causing Massachusetts customers to suffer over $430,000 in losses.
Despite being aware of the broker’s alleged misconduct after conducting two reviews of an individual investor’s trust account, Stifel failed to require the broker’s customers to reallocate their accounts. To resolve the matter, Stifel was ordered to pay a fine of $100,000, reimburse one customer $133,907.84, and offer other harmed customers remuneration.
Failure to Supervise – Stifel Nicolaus & Company
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.
Filing a FINRA Claim
If your broker has defrauded you, you may be able to file a claim with FINRA to seek resolution through arbitration. FINRA arbitration can be a complex and technical process, and having an experienced attorney who is knowledgeable about securities law can greatly increase your chances of success. The FINRA attorneys at the White Law Group can help you with many aspects of the arbitration process including evaluating the merits of your claim and determining whether you have a strong case for arbitration.
Our attorneys can assist you in drafting a statement of claim that accurately reflects the allegations of fraud and the damages you are seeking. They will also represent you at the arbitration hearing, present evidence and make arguments on your behalf. They can also negotiate a settlement on your behalf, which may be an option to consider before going to arbitration.
Working with a FINRA attorney can help ensure that your interests are protected throughout the FINRA arbitration process, and that you have the best possible chance of achieving a favorable outcome.
Keep in mind, FINRA arbitration is generally a faster and less expensive alternative to a traditional court proceeding.
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 & Company 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.
Last modified: March 18, 2024
