The Financial Industry Regulatory Authority has ordered Stifel, Nicolaus to pay over $1.9 million in restitution to over 1,700 customers regarding early rollovers of Unit Investment Trusts (UITs). It also fined the firm $1.75 million for deceiving customers about rollover costs and for violations. Even so, in agreeing to settle the matter, Stifel neither admitted nor denied the charges.
The regulatory body contends that between 2012 and 2016 the firm sold $10.9 billion in UIT’s, of which $935.2 million were early rollovers. FINRA accused the company of failing to adequately supervise its employees and of permitting them to bilk customers out of $1.9 million in fees charged for rolling over their customers’ UITs before their maturity dates. It also alleges that Stifel failed to inform its customers about the fees they would have to pay if they rolled their investments over early, understating “the costs to customers by approximately 49%.”
FINRA said that its action was the fruit of a “targeted examination with respect to UITs” that it undertook in 2016.
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