A panel of Financial Industry Regulatory Authority arbitrators issued an award against St. Louis-based Stifel Nicolaus & Co. in a dispute with two former customers, according to Advisor Hub.
The three public FINRA arbitrators ordered Stifel to pay over $1 million in compensatory damages to the customers, Gary T. Read and Jody L. Read.
The award stated the two had asserted claims linked to unspecified securities that included negligent supervision and violations of Regulation Best Interest. No broker was specified in the allegations. In their claim, the Reads sought more than $2.1 million in damages in addition to legal fees and other costs.
Along with the compensatory damages, the arbitration panel ordered Stifel to pay $10,000 in sanctions as well has half the approximately $32,000 in hearing fees. The other half was assigned to the Reads
The arbitrators did not provide reasons for their award, which is normally the case unless a rationale is requested by the two sides.
Jeff Sonn, who represented the Reads, did not return a request from AdvisorHub for comment. A spokesperson for Stifel also did not return a request for comment.
Stifel has filed a motion in federal court to vacate another FINRA arbitration decision from earlier this year that awarded Stifel clients David Jannetti of Miami and his three children $132.5 million in damages and legal fees in a dispute over the structured note strategy of former broker Chuck A. Roberts. Stifel’s action is based on a claim that one of the arbitrators was biased.
The Jannettis alleged that they were misled into believing that Stifel was using low-risk structured notes in their investments. They accused the firm of breach of fiduciary duty, negligence, negligent supervision, fraud, breach of contract, and violation of the Florida Securities and Investor Protection Act. In ruling against Stifel, the FINRA arbitrators said that Stifel “had actual knowledge of the wrongfulness of the conduct and the high probability that injury or damage to [the Jannettis] would result and, despite that knowledge, intentionally pursued that course of conduct, resulting in damage.”
Handling financial services disputes requires counsel with a significant understanding of the industry, the laws, rules and regulations that impact our clients and the forums in which disputes are adjudicated. At Hyman Cotter PC, our attorneys’ unparalleled litigation experience comes from leveraging their industry-specific knowledge developed from working at firms such as Morgan Stanley, UBS Financial Services, serving as outside counsel for some of the world’s largest law firms, and through prior affiliations with the SEC. For more information about our arbitration and litigation services, please contact us 312-291-4600 or through our online contact form.
