Stifel Must Pay Clients Over $14M in Structured Notes Case: FINRA Panel
The award includes $9 million in punitive damages.
Stifel Nicolaus must pay roughly $14.2 million in damages, interest and fees to a Florida couple and a related family business over their investments in structured notes, a Financial Industry Regulatory Authority arbitration panel ruled last week.
Louis and Elizabeth DeLuca of Jupiter, Florida, and the business allege they sustained significant losses related to investments in complex securities known as structured notes, according to a complaint filed Friday in U.S. District Court in Florida seeking to confirm the FINRA decision issued a day earlier.
Stifel plans to request that the award be vacated.
The couple first made claims against Stifel with FINRA in May 2023, alleging breach of fiduciary duty, negligence, negligent supervision, fraud, breach of contract and violation of the Florida Securities and Investor Protection Act. They had sought $1 million to $5 million in punitive damages, plus costs, fees and other relief that the panel deemed appropriate.
Stifel denied the claims, asked that FINRA award the DeLucas nothing, and sought expungement of material from broker Chuck Roberts’ record; Roberts wasn’t named in the FINRA case or related court complaint.
The FINRA arbitration panel last week found that Stifel must pay the DeLucas nearly $2 million in compensatory damages, including interest; pay Louis DeLuca’s business, UBS Inc.; over $2 million in compensatory damages, including interest; and pay all three claimants $9 million in punitive damages and $1.1 million in attorney’s fees, plus $100,000 in costs.
The FINRA panel denied Stifel’s expungement request.
The three-member panel had heard evidence over 11 days over the summer.
The DeLucas, who maintained brokerage accounts with Stifel, allege they sustained losses in the structured notes and in “volatile and high risk equities,” caused by the brokerage and registered representative Roberts, according to the court filing.
Stifel said through a spokesperson via email Monday:
“While we respect the FINRA arbitration process, we strongly disagree with this panel’s decision and the way it conducted the hearing. This windfall award vastly exceeds any actual damages incurred by an extremely sophisticated client and is simply not supported by the facts of the case. We will be moving to vacate the award.”
Roberts’ FINRA BrokerCheck record indicates he faces several pending customer disputes.
Pictured: Stifel headquarters in St. Louis