- Free Consultation: 561-406-4644 Tap Here To Call Us
Stifel, Nicolaus & Co., Inc. and David Noack – South Florida Unsuitable Investment and Breach of Fiduciary Duty Litigation and Arbitration Attorney
Stifel, Nicolaus & Co., Inc. and David Noack – South Florida, including Fort Lauderdale, Deerfield Beach, Pompano Beach and Boca Raton, Unsuitable Investment and Breach of Fiduciary Duty Litigation and Arbitration Attorney
Securities and Exchange Commission v. Stifel, Nicolaus & Co., Inc., et al., Civil Action No. :11-cv-755 (E.D. Wis. filed Aug. 10, 2011)
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
The SEC recently announced that St. Louis, Missouri-based broker-dealer, 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.
The SEC’s complaint, filed on August 10, 2011 in the U.S. District Court for the Eastern District of Wisconsin, alleged that Stifel and Noack harmed five Wisconsin school districts by selling them $200 million in unsuitably risky and complex synthetic CDOs funded largely with borrowed money. Ultimately, the synthetic CDOs failed and the five Wisconsin school districts suffered a complete loss of their cash investment.
On December 6, 2016, the Honorable Charles N. Clevert, Jr. entered a final judgment permanently enjoining Stifel and Noack from violating Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, and ordering Stifel and Noack to jointly pay disgorgement and prejudgment interest of $2.44 million and to each pay civil penalties of $22.5 million and $100,000, respectively. The judgment also requires Stifel to distribute $12.5 million of the ordered disgorgement and penalties to the injured school districts. This distribution, along with the prior Fair Fund distribution of $30.4 million in a related case instituted in September 2011 and settlements obtained in the school districts’ private lawsuit, will fully compensate the five Wisconsin school districts for their losses.
In addition, the final judgment also recites Stifel’s and Noack’s admissions to misconduct that harmed the five Wisconsin school districts. Section VI of the final judgment reflects that Stifel and Noack admitted, among other things, that they made certain material misstatements to the school districts that overstated the safety and downplayed the risks of investing in CDOs, and failed to disclose certain material facts, and did not independently perform any meaningful suitability analysis with respect to the CDO investments.
The court’s entry of the final judgment resolves this litigation in its entirety.
Noack also has consented to the entry of an SEC order, based on the court’s entry of judgment, which imposes industry and penny stock bars, with the right to reapply after five years.
Contact Us:
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.
At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.