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Stifel, Nicolaus & Co. was ordered Monday, May 1, 2023, to pay $2.5 million by Massachusetts’ top securities regulator, William Galvin, for ignoring a former Stifel broker-dealer agent’s questionable trades that resulted in many of his clients — including older adults, nonprofits and a church — to be charged excessive and unauthorized fees.
Regulators also ordered the investment firm to pay more than $700,000 in restitution to affected customers, as part of a consent order the broker-dealer has entered with Galvin’s Securities Division.
Former Stifel broker-dealer agent Joseph Crespi “subjected many of his clients to predatory sales practices over several years, leading to higher commission sales for himself and his employer,” Galvin said Monday in a statement.
The regulator’s investigation further found “wide-ranging harm” to investors resulting from “multiple instances of Stifel employees using personal cell phones to conduct business and distributing retail communications in violation of firm and regulatory requirements.”
From 2018 to 2022, Crespi was “Stifel’s sixth highest revenue-producing employee in New England as of June 30, 2019 (as considered year-to-date) and continued to be a top producing agent […] thereafter,” according to the regulator consent order.
“Despite repeated warnings by Crespi’s own branch manager,” Galvin’s office said, “Stifel failed for years to discipline Crespi or take any meaningful actions to correct his behavior.” The firm chose to ignore the harm Crespi was doing and could be argued that the ignorance was willful because of Crespi’s production for the firm.
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