A series of claims totaling $24.5 million in damages filed against Stifel Nicolaus & Company alleges the firm, through Chuck A. Roberts and other brokers, breached its fiduciary duty to its customers through negligence and unauthorized trading, resulting in significant, multi-million dollar damages through product losses and generation of excessive, expensive commissions and fees.
Stifel Nicolaus stands accused of unsuitably selling complex, costly, and risky structured products, including structured notes, to customers for whom the level of risk combined with an inappropriately frequent trading strategy resulted in damages through not just losses from the risky products themselves, but through excessive and illicit commissions generated by the unauthorized and exorbitant trades that complaints allege were unnecessary.
One of the allegations holds that Stifel broker Roberts inappropriately overconcentrated client positions in bio/technology structured notes in companies such as Dynatrace, Pinterest and Snapchat, as well as volatile index funds such as the SPDR S&P Biotech ETF (NYSE: XBI), or Spider S&P Biotech Exchange Traded Fund.
Overconcentration increases risk and because the structured products and funds were already quite risky and volatile, this unsuitable maneuver only served to further compound that risk for Stifel Nicolaus customers. The XBI index, for what it's worth, has lost more than half of its value since 2021.
At the heart of the breach of fiduciary duty claim (or FiDu) is an allegation that Stifel Nicolaus brokers and advisors put their own interests ahead of their clients. As one of the claimants' representatives stated, "It appears that the methodology here was to generate as much money as possible for the broker."
This, of course, is not supposed to happen and is actually against industry rules, not to mention potential violations of securities laws.
If you invested with Stifel Nicolaus & Co., broker Chuck Roberts or with any investment adviser or representative who put their interests ahead of yours and unsuitably sold you excessively risky structured products or excessively traded in your accounts, thus producing exorbitant and improper commissions, fees, losses, or other damages, 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.