National investment loss lawyers KlaymanToskes reports that Stifel, Nicolaus & Co. has been ordered to pay $3.2 million by Massachusetts securities regulator William Galvin, for ignoring the red flags and questionable trades of former broker Joseph Crespi, which caused many of his customers – including elderly investors, non-profits, and churches – to suffer losses from excessive and unauthorized fees.
Former broker/investment advisor Joseph Richard Crespi was registered with Stifel, Nicolaus & Co. from 2018 to 2022 in Taunton, MA. He was then employed at Ameriprise Financial Services in Taunton, MA, where he resigned following his notification of a suspension and allegations of misconduct.
Investors that suffered losses with Joseph Crespi and/or any other broker at Stifel, Nicolaus & Co. in Taunton, MA, or in any other location may have recovery options. Contact attorney Lawrence L. Klayman, Esq., at 888-997-9956 or lklayman@klaymantoskes.com for a free consultation to discuss legal options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
According to Massachusetts Secretary of the Commonwealth William F. Galvin, Stifel, Nicolaus & Co. was “well aware” of Crespi’s “predatory sales practices” and allowed his misconduct to continue for many years. Galvin also stated that “This firm failed its customers when it dragged its feet for years, avoiding taking meaningful action to protect their best interests.”
Crespi, who was once Stifel’s sixth-largest producing broker in New England, generated a return on assets of over 4% on 24 client accounts while trading excessively in others. In May 2020, Stifel assembled a compliance report on the broker which revealed that Crespi’s 20 highest-producing customer accounts lost at least $820,000. Out of the accounts reviewed, eight belonged to a non-profit organization or a church. Moreover, the average age of the remaining customers’ accounts was 76.
According to the order, from February 2020 to April 2020, Crespi’s trading triggered over 50 alerts at Stifel, which was more than any other employee during the same time period. Rather than taking disciplinary action, Stifel recommended Crespi convert certain customers to accounts with flat annual fees. The firm went on to award Crespi for his high production at a “recognition event” known as the Chairman’s Council in 2021.
Stifel’s sanctions, ordering the firm to pay $3.2 million, includes $700,000 to be paid in restitution to customers of the firm. Stifel has also offered to pay additional restitution to customers who were overcharged commissions in excess of 5% on equity transactions.
The state regulatory authority revealed that it also discovered more extensive supervisory oversights at Stifel, Nicolaus & Co. branch, including various occurrences of misconduct by Stifel staff. Crespi’s branch manager allegedly breached his own fiduciary duty by utilizing a personal mobile phone for conducting business communications.
According to national investment loss attorney Lawrence L. Klayman, Esq., “The allegations of failure to supervise and other securities violations by Stifel, Nicolaus & Co. within the regulatory complaints filed against the firm and its broker may indicate a systemic issue at Stifel’s MA branches. Other Massachusetts customers of this branch may have been impacted by broker misconduct and faced severe losses. These customers may be entitled to a financial recovery and are encouraged to contact us to discuss their legal options.”
Overall, these sanctions represent the third time Stifel, Nicolaus & Co. has been sanctioned by the Commonwealth of Massachusetts in the past five years. The firm has been hit with a total of $400,000 in fines and restitution by the state of Massachusetts in two prior cases of misconduct.
According to the firm’s FINRA BrokerCheck record, Stifel, Nicolaus & Co. has paid a total of $14 million in fines, civil penalties, disgorgement, and restitution to customers as part of settlements with regulators such as FINRA in the past five years.
Customers of Joseph Crespi and/or any other broker at Stifel, Nicolaus & Co. who have experienced significant investment losses are encouraged to contact attorney Lawrence L. Klayman, Esq. at 888-997-9956 or lklayman@klaymantoskes.com for a free and confidential consultation.
Our firm offers legal services on a contingency fee basis, meaning we do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com