Galvin Levies $2.5 Mil Fine In Securities Case

A Missouri broker-dealer will be required to pay a $2.5 million fine and more than $700,000 in restitution after allegedly failing to prevent one of its agents from taking advantage of Massachusetts customers.

Secretary of State William Galvin, who oversees the securities division, announced Monday a consent order with Stifel, Nicolaus & Company, Inc., which was previously ordered to pay $400,000 in fines related to a pair of consent orders in 2018 and 2021.

The secretary’s office said a former agent of the broker-dealer, Joseph Crespi, deployed “predatory” sales practices with elderly, nonprofit and church clients to boost commissions over a years-long period. Crespi was suspected of making trades not authorized by clients, in one case involving a deceased client’s account, according to Galvin’s office.

Stifel allegedly allowed Crespi’s misconduct to continue for more than three years before firing him, even though his branch manager and other internal systems flagged potential issues. In one internal communication examined by regulators, a Stifel employee said Crespi would continue his behavior because “spots of a leopard do not change.”

“As the size of this fine illustrates, I will not tolerate repeated rule-breaking by firms that enact toothless compliance and supervisory systems, while placing their own bottom line above investor protection,” Galvin said in a statement. “This firm failed its customers when it dragged its feet for years, avoiding taking meaningful action to protect their best interests.”

In addition to the fine and restitution for Crespi’s clients, the company will also provide additional restitution to customers charged commissions on equity transactions above 5 percent, Galvin’s office said.