FINRA Arbitration Orders Stifel to Pay $133 Million Over Broker's Structured Note Strategy
From the desk of Jim Eccleston at Eccleston Law
A FINRA arbitration panel has ordered Stifel Financial’s retail broker-dealer to pay nearly $133 million in damages related to a structured note investment strategy promoted by Miami-based broker Chuck A. Roberts. According to AdvisorHub, the award includes $80 million in punitive damages, $26.5 million in compensatory damages, and $26.5 million in attorneys’ fees.
The arbitration panel found that Stifel knowingly engaged in wrongful conduct that harmed the claimants. The firm failed to warn customers about overconcentration in limited industries and did not provide the required heightened supervision of Roberts. The panel also determined that Stifel permitted and encouraged the use of text messages to market “custom” structured note products, violating SEC recordkeeping requirements. AdvisorHub reports that these texts contained misleading terminology, further exacerbating the firm’s regulatory failures.
The $133 million award is the second largest in FINRA arbitration history, surpassing a recent $95 million decision against UBS. Roberts has been the subject of more than $48 million in pending damage claims from 18 complaints since 2022. Stifel has previously faced arbitration losses, including $2.4 million and $14.3 million in separate cases last year, and has settled additional claims.
According to AdvisorHub, a Stifel spokesperson criticized the ruling as excessive and stated that the firm intends to seek judicial review. The company argued that the claimants were sophisticated investors who understood the risks, selected their investments, and only complained after incurring losses.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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