Missouri Secretary of State Robin Carnahan has filed a lawsuit against Stifel, Nicolaus & Co., parent company Stifel Financial Corp., and 16 managers and agents of the firm for alleged fraudulent auction-rate securities sales practices.
The lawsuit was filed March 12 in the Circuit Court of Franklin County, Mo., charges that Stifel's ARS retail brokers omitted or gave false information to clients. It takes the state ARS investigations a step further by naming individual brokers who, if convicted, could face penalties ranging from between $10,000 and $1 million. The case also is against a retail broker of ARS that was not a major underwriter. Most of the ARS enforcement actions or litigation last year were with underwriters.