Securities News Releases

Monday, December 28, 2009
Contact: Laura Egerdal, (573) 526-0949
Contact: Abe Rakov, (573) 526-4734

Carnahan and Attorney General’s Office Reach Settlement with Stifel Nicolaus

Hundreds of investors to get early access to needed cash

– Secretary of State Robin Carnahan and the Attorney General’s Office today announced that Stifel, Nicolaus & Co., Inc., will return up to $41 million to investors by the end of 2010 after the terms of a settlement were reached by her office.

Under the terms of the settlement, every Stifel customer holding auction rate securities will receive a partial payout by January 15, 2010, and all investors that held $150,000 or less will be completely paid back by December 2010. Remaining investors will be paid back fully by the end of 2011.

“The number one goal of my office has always been to get Stifel investors their money back as quickly as possible,” Carnahan said. “With this settlement, 90% of Missourians and 80% of Stifel customers nationwide will be made whole by the end of 2010, many of them a year and half ahead of Stifel’s original buyback offer.”

This action also settles a lawsuit filed by the Attorney General’s Office.

“This agreement with Stifel means that investors get quicker access to their money that was previously tied up in auction rate securities,” said Joe Dandurand, Deputy Attorney General.

The terms reached today, negotiated by the securities divisions of Missouri and Indiana as part of a national task force, also require Stifel to work with a bank affiliate to offer investor-friendly loans to customers that need immediate cash. Stifel must hire a securities-industry expert to review its training, marketing and selling of nonconventional financial products in the future. In addition, Stifel will pay a penalty of $525,000 as well as costs incurred by the states for its failure to adequately train and supervise agents who sold auction rate securities.

When the auction rate market collapsed in February 2008, investors were left without access to their money. Over the past year, hundreds of investors called Secretary Carnahan’s office because they could not access their money to cover medical expenses, pay for education, or retire as planned.

“It’s good to have this settled. Stifel did the right thing by buying these investments back,” said Roy Gerdel, a Stifel investor from Missouri. “The Secretary of State’s Office did the right thing by working with Stifel to accelerate the process.”

Since the meltdown, major financial firms across the country have worked with state regulators to buy back auction rate securities from their clients. Carnahan’s office has reached settlements with 12 firms, including Wachovia Securities and Commerce Brokerage Services, which helped tens of thousands of investors get access to the money they desperately needed. Nationwide, settlements reached by Carnahan’s Securities Division have returned over $10 billion to auction rate securities investors.

For more information regarding investments and fraud protection, or for information regarding a company or representative, call the Missouri Investor Hotline toll-free at 1-800-721-7996 or visit the Secretary of State's web site at

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