FINRA ordered Stifel, Nicolaus & Company to pay $3.65 million for unsuitable early unit investment trust (UIT) rollover recommendations and for supervisory deficiencies that prevented the firm from detecting the unsuitable UIT rollovers that caused customers to incur nearly $2 million in sales charges.
In a news release, FINRA wrote that for nearly five years, Stifel, Nicolaus & Co did not have a supervisory system in place reasonably designed to supervise the suitability of early UIT rollovers. This is hardly Stifel Nicolaus' first brush with charges of inadequate supervision.
In 2012, FINRA ordered Stifel Nicolaus to pay $600,000 for failing to supervise broker Kenneth Neely, who allegedly ran a Ponzi scheme that generated red flags the firm failed to detect, and in 2014, FINRA ordered Stifel Financial Corp subsidiaries Stifen Nicolaus and Century Securities Associates to pay $1.025 million over unsuitable recommendations of complex leveraged and inverse exchange-traded funds (ETFs) and related supervisory and training deficiencies, resulting in customer losses.
As for the present unsuitable UIT rollover charges, investigators found that customers may have incurred approximately $1.9 million in sales charges that they would not have been exposed to had they held UITs until their maturity dates.
FINRA also found that Stifel Nicolaus sent approximately 600 letters to customers containing inaccurate information or omissions about costs and fees related to early UIT rollovers and switches. Investigators estimated the firm underestimated the costs to customers by nearly 50%.
If you have invested with Stifel, Nicolaus & Company or with any other firm, broker, or financial adviser whose unsuitable recommendations, excessive trading, or solicitation to engage in financially harmful transactions has resulted in damages or losses, such as an early UIT rollover that caused you to incur unnecessary and costly sales charges, commissions, or other fees, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.