Defendant Name:
Stifel, Nicolaus & Company, Inc.
Defendant Type:
Subsidiary of Public Company
Public Company Parent:
Stifel Financial Corp.
SIC Code:
6211
CUSIP:
86063010
Initial Case Details
Legal Case Name
SEC v. Stifel, Nicolaus & Co., Inc. and David W. Noack
First Document Date
10-Aug-2011
Initial Filing Format
Civil Proceeding
Case Number
11-cv-00755
Allegation Type
Municipal Securities & Public Pensions
Federal District Court
Wisconsin, Eastern District of Wisconsin
Violations Alleged
•
Sec 17(a) (Not specified)
•
Section 15(c)(1)(A) Exchange Act
Additionally,
David W. Noack is alleged to have aided and abetted Stifel, Nicolaus & Company, Inc.'s violation of Sec 15(c) of the Exchange Act.
Resolutions
First Resolution Date
06-Dec-2016
Headline Total Penalty and Disgorgement
$24,600,000
Related Documents:
2011-165
10-Aug-2011
Press Release--Civil Action
SEC Charges Stifel, Nicolaus & Co., and Executive with Fraud in Sale of Investments to Wisconsin School Districts
On August 10, 2011, the SEC announced that it "charged St. Louis-based brokerage firm Stifel, Nicolaus & Co. and a former senior executive with defrauding five Wisconsin school districts by selling them unsuitably risky and complex investments funded largely with borrowed money."
Complaint
According to the SEC: "This case involves the fraudulent sale of complex financial instruments to five school districts in the State of Wisconsin (the 'School Districts') by Stifel, Nicolaus & Co., Inc. ('Stifel') and David Noack, its former Senior Vice President. Stifel and Noack recommended a series of investments to the School Districts as a means of addressing unfunded retiree benefits owed to current and former employees. Stifel and Noack encouraged the School Districts to invest in notes linked to the performance of synthetic collateralized debt obligations ('CDOs') comprised of a portfolio of 100 or more credit default swaps on corporate bonds.... Stifel and Noack knew that the School Districts were risk-averse, and they knew that the preservation of capital was of paramount importance. They materially mislead the School Districts about the risks of the investments, the likelihood of defaults, and the safety of their principal."
SEC Charges Stifel, Nicolaus and Former Executive with Fraud in Sale of Investments to Wisconsin School Districts
On August 10, 2011, the SEC announced that it "charged Stifel, Nicolaus & Co., Inc., a St. Louis-based broker-dealer, and former Stifel Senior Vice President David W. Noack with defrauding five Wisconsin school districts by selling them unsuitably risky and complex investments funded largely with borrowed money." The SEC alleged that: "Stifel and Noack made sweeping assurances to the school districts, misrepresenting that it would take '15 Enrons' -- a catastrophic, overnight collapse -- for the investments to fail."
Final Judgment as to Defendants Stifel Nicolaus & Company, Incorporated and David W. Noack
On December 6, 2016, Judge Charles N. Clevert, Jr. entered the Final Judgment as to Defendants Stifel Nicolaus & Company, Incorporated ("Stifel") and David W. Noack ("Noack") (the "Final Judgment"), thereby resolving this litigation in its entirety.
Final Judgment as to Defendants Stifel Nicolaus & Company, Incorporated and David W. Noack
The Court stated that "Stifel and Noack acted negligently by making material misstatements and omissions to the School Districts and by failing adequately to investigate the appropriateness of the CDO investments. By engaging in the acts and omissions described above, Stifel and Noack violated the federal securities laws."
Stifel, Nicolaus and Former Stifel Executive Pay Over $24.5 Million and Admit Wrongdoing in Connection with the Sale of Synthetic CDOs to Wisconsin School Districts
On December 7, 2016, the SEC announced that "Stifel, Nicolaus & Co., Inc. and its former Senior Vice President David W. Noack agreed to admit wrongdoing and pay over $24.5 million to resolve an SEC enforcement action involving the sale of synthetic collateralized debt obligations (CDOs) to five Wisconsin school districts."
Other Defendants in Action:
