Lawyers at Stifel Financial Corp. last month were busy as they continued to clean up the legal mess stemming from a former star broker based in Miami, Chuck Roberts, who sold clients high-risk structured notes.
According to the BrokerCheck history of Roberts, who was barred in July from the securities industry by FINRA, Stifel Nicolaus & Co. Inc. agreed in September to settle three investor claims of former clients of Roberts for a total of $3.4 million.
Stifel has paid millions of dollars in damages to former clients of Roberts over the past year. According to a tally of Roberts' BrokerCheck report, Stifel is on the hook to close to $180 million in damages, legal fees and settlements in investor complaints involving Roberts.
A huge chunk of that amount, $132.5 million, is subject to a yet undecided motion to vacate that Stifel filed in May in federal court in Miami. Clients in that legal claim had initially sought at least $5 million in damages. The size of that FINRA award stunned the securities industry, and Stifel has been settling some client complaints ever since.
“What we’ve alleged in general is that Roberts took advantage of all kinds of people, those on different ends of the education spectrum,” said Jeff Erez, a plaintiff’s attorney representing the majority of former Roberts’ clients suing Stifel.
Erez declined to comment about the trio of settlements from last month, only adding he worked with two of the families.
The amounts for each legal settlement were $1.31 million, $575,000 and $1.5 million, according to BrokerCheck.
A Stifel Financial spokesperson on Wednesday did not return a call to comment.
Stifel faces at least 21 pending investor lawsuits, via FINRA arbitration, per BrokerCheck.
Roberts left Stifel in July and days later was barred from the securities industry. Roberts refused to appear to testify to FINRA, resulting in his being barred from the securities industry for failing to cooperate with the regulator. According to the FINRA order, he consented to FINRA’s findings without admission or denial.
The client complaints, in general, stem from losses linked to Roberts’ structured-note strategy, with customers claiming the strategy was not in their best interest or that Roberts had inaccurately described the products.
The performance of structured notes is typically tied to an underlying asset, such as a specific stock or an index such as the S&P 500 stock index.
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