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Lost Money with Stifel, Nicolaus & Company? Investors May Be Able to Recover Losses

Mar 3, 2023 Articles

Stifel, Nicolaus & Company, Incorporated (CRD #793) is a broker-dealer and advisory firm. Their website states that the firm employs over 2,318 financial advisors across 378 branches. The firm was formed in Missouri and 1900 and has headquarters in St. Louis, Missouri.

Investors should know about the regulatory actions against the firm and the potential to recover losses in cases of broker fraud or misconduct. There are 196 disclosures on the firm’s record, 137 of which are regulatory events. Investors should be aware of these regulatory actions and the alleged harm they caused Stifel’s customers.

Can I Sue Stifel, Nicolaus & Company?

Yes, you can resolve disputes with Stifel, Nicolaus & Company–although you may use different terminology than you would in a civil case. Investors typically resolve their disputes using FINRA arbitration instead of filing a case in civil court.

  • Most investment contracts include pre-dispute arbitration clauses that require investors to use FINRA arbitration instead of civil suits.
  • Firms may prefer arbitration because the proceedings are non-public, meaning there is less publicity for the firm.
  • FINRA arbitration is meant to be simpler and less time-consuming than civil lawsuits.
  • FINRA arbitration awards are final and binding, so investors may want a securities lawyer to help them obtain a fair settlement or award.

Stifel, Nicolaus & Company Regulatory Disclosures

Read about the most recent allegations filed by regulators against Stifel, Nicolaus & Company, according to their detailed BrokerCheck record.

Alleged Failure to Supervise and Overconcentration

On March 31, 2021, the Commonwealth of Massachusetts alleged that Stifel failed to properly supervise a registered representative who heavily concentrated the client in the precious metal sector. Overconcentration in any one stock or sector exposes investors to unnecessary risk. The firm consented to pay $233,907.84 as a result.

Alleged Pre-Arranged Trading

FINRA alleged on September 1, 2020, that Stifel & Nicolaus lacked a supervisory system designed to catch pre-arranged transactions. Pre-arranged stock trades among market makers is illegal. Firms can use systems like trade reports or exception reports to detect these types of trades, but instead, Stifel, Nicolaus & Company simply relied on its supervisors. While the supervisors flagged some prohibited transactions, they allegedly did not flag pre-arranged transactions.

The firm consented to a monetary fine of $40,000 as part of their Acceptance, Waiver, and Consent agreement.

UIT Rollovers

On May 28, 2020, Stifel & Nicolaus entered into an Acceptance, Waiver, and Consent agreement with FINRA in which he consented to the entry of findings that it failed to supervise early rollovers of Unit Investment Trusts (UITs). Selling a UIT before its maturity date to purchase another UIT or mutual fund may incur unnecessary sales charges. FINRA alleged that in this case, Stifel & Nicolaus customers may have incurred $1,891,188.13 in unnecessary sales charges.

The firm allegedly sent switch letters to send to customers, but allegedly did not verify the information contained in the letters. According to FINRA, some of the switch letters understated the sales charges, and others did not list any sales charges.

As a result of the allegations, the firm consented to a fine of $1.75 million and to pay over $1.8 million, plus interest, to customers.

Stifel, Nicolaus & Company Brokers

If you unexpectedly lost money after working with the following brokers, you should speak with a securities lawyer. The following brokers are either registered with Stifel, Nicolaus & Company or have registered with them in the firm in the past 10 years.

 

Stifel, Nicolaus & Company Fees

Stifel Nicolaus & Company offers broker-dealer as well as investment advisory firm services. Below, we are focusing on the fees associated with the brokerage fees. There is a more detailed breakdown in their Fee Schedule.

When Stifel sells you an investment out of their inventory, they add a “mark up” or “mark down” fee which benefits the firm.

The firm may also charge the following fees:

  • Custodial fees
  • Account maintenance fees
  • Administrative service fees

Stifel, Nicolaus & Company Conflicts of Interest

Stifel is compensated for each securities transaction their investors execute. As such, Stifel brokers have an incentive to encourage you to trade more frequently and in greater amounts.

Buying Investments on Margin

If your account is approved for margin trading, you may choose to borrow money from the firm to purchase securities. Stifel, Nicolaus & Company has an incentive to recommend margin trading because they charge interest on the amount you borrow from the firm.

Margin trading is very risky and can amplify any losses suffered in the margin account. If the account drops below a certain point, the investor may receive a margin call instructing them to deposit more money in the account, or risk having the firm liquidate other securities to cover the difference.

Affiliate Products

The firm earns greater fees if you invest in a product that Stifel or one of its affiliates offers.

These might include:

If your broker recommended one of these products to you, ask about what commissions your broker earns.

Stifel, Nicolaus & Company also offers the following products: