Stifel managing director won't face SEC charges
A managing director at Stifel will not face enforcement action following a Securities and Exchange Commission investigation.
A source familiar with the matter said the investigation of Jon Walker for failing to reasonably supervise a registered representative was closed with a decision not to recommend enforcement action.
The disclosure of the investigation is no longer displayed on BrokerCheck, the Financial Industry Regulatory Authority’s public online database to provide information about brokers and brokerage firms.
The source said they were not aware of any pending FINRA investigation of the matter. Securities lawyers had said it was unlikely for FINRA to bring separate charges.
The registered representative under Walker's supervision was associated with Alabama-based financial services firm Sterne, Agee & Leach Inc. in 2014 or 2015, according to the original disclosure.
Walker was a senior managing director at Sterne, Agee & Leach Inc. from 2011 to 2015. That firm was acquired by Stifel in 2015, and sold about a year later.
The investigation appeared likely to be connected to Deborah Kelley, a broker who worked with Walker at Sterne, Agee & Leach and Stifel from 2012 until her termination in 2015. Kelley pleaded guilty to bribing former New York State Common Retirement Fund officer Navnoor Kang.
Kelley's co-defendants Gregg Schonhorn, a broker for Memphis-based FTN Financial Securities Corp. and Kang also pleaded guilty to criminal charges. Kang was sentenced to 21 months in prison.
Walker was a senior managing director at Sterne during the same time Kelley was there.
In addition to her criminal conviction, Kelley was charged by the SEC in 2016 for providing Kang with improper benefits including a luxury vacation and VIP tickets to a Paul McCartney concert between 2014 and 2016.
The SEC case against Kelley, Kang, and Schonhorn was closed in December when a federal judge issued three orders, enjoining Kang, Kelley and Schonhorn from committing any further violations of the federal securities laws. Kang’s order also bars him from “participating in any decisions involving investments in securities by public pensions as a trustee, officer, employee or agent.”
Kelley and Schonhorn have been barred by FINRA from acting as a broker or otherwise associating with a broker-dealer firm. Kelley currently is involved with college relations at the University of California- Berkeley where she has been since 2018.
Kang could have faced between 210 and 262 months in prison, and a fine between $40,000 and $400,000 under sentencing guidelines submitted by the Justice Department.
Kang, Schonhorn and Kelley all pleaded guilty to criminal charges in 2017, and Kang was sentenced to 21 months in prison. Last year, the SEC decided to forgo the pursuit of any civil monetary penalties against the three.
Stifel declined to comment on the end of the investigation.