Stifel Ordered to Pay $133 Million in FINRA Arbitration

Posted on April 15th, 2025 at 1:38 PM
Stifel Ordered to Pay $133 Million in FINRA Arbitration

From the desk of Jim Eccleston at Eccleston Law

Stifel Financial’s retail broker-dealer must pay nearly $133 million in damages following a FINRA arbitration tied to Miami-based advisors' structured note strategy. AdvisorHub reports that the award includes $80 million in punitive damages, $26.5 million in compensatory damages, and an equal amount in attorneys’ fees.

The arbitration panel issued a scathing decision, citing 10 major failures by Stifel. The firm allegedly had actual knowledge of the wrongful conduct and the likelihood of harm but chose to proceed regardless. The panel found that Stifel failed to warn customers about overconcentrated accounts in limited industries, and neglected to implement heightened supervision over Roberts as required. According to AdvisorHub, the ruling marks one of the largest arbitration awards in FINRA’s history, surpassing a $95 million decision against UBS last week.

It also underscores the mounting challenges Stifel faces, as Roberts has been the subject of more than $48 million in pending damage claims from 18 investor complaints since 2022. According to AdvisorHub, a Stifel spokesperson criticized the decision, calling it an "outsized award" unsupported by facts or law. The firm plans to seek judicial review. The spokesperson also argued that the claims were brought by sophisticated investors who understood the risks but only complained after suffering losses.

The arbitration award represents over 10 percent of Stifel’s Global Wealth division’s $1.2 billion in pretax net income for 2024. The firm has indicated it will appeal, as it has done in prior cases.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

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