Stifel Fined $2.5M Over Broker's Shady Trades for Seniors, Church
“Despite repeated warnings by Crespi’s own branch manager,” Galvin’s office said, “Stifel failed for years to discipline Crespi or take any meaningful actions to correct his behavior.”
Galvin’s office said that internal Stifel communications examined by the Securities Division showed that “the broker-dealer was well aware of Crespi’s questionable trade practices, with one Stifel employee stating that Crespi would continue to attempt to violate certain rules, as ‘spots of a leopard do not change.’”
The consent order details numerous times that Crespi was suspected of making trades not authorized by clients, including at least one attempt to trade in a deceased client’s account. Stifel did not allow the trade to be processed, according to the order.
Crespi, Galvin’s office said, “took steps to attempt to disguise his actions, though his branch manager and other internal systems repeatedly flagged his transactions for review. Nonetheless, Stifel allowed the misconduct to continue for more than three years” before terminating him.
“As the size of the 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. “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 required by the consent order, Stifel has also agreed to provide restitution for Massachusetts customers who were charged commissions on equity transactions in excess of 5%, Galvin’s office said.
Stifel management has also been ordered to certify changes to its supervisory and compliance apparatus, concerning brokerage sales practices.
The consent order, which was filed over the weekend, is the third enforcement action the Securities Division has taken against Stifel over the past five years. The Missouri-based broker-dealer has previously been ordered to pay fines totaling $400,000 and provide restitution to Massachusetts customers, stemming from consent orders filed in 2018 and 2021.
