Stifel Must Pay Clients Over $14M in Structured Notes Case: FINRA Panel

What You Need to Know

A Florida couple filed a complaint claiming damages related to complex securities.
The award includes $9 million in punitive damages.
Stifel called the award a windfall and said it would move to vacate it.

Stifel Nicolaus must pay roughly $14.2 million in damages, interest and fees to a Florida couple and a related family business over their investments in structured notes, a Financial Industry Regulatory Authority arbitration panel ruled last week.

Louis and Elizabeth DeLuca of Jupiter, Florida, and the business allege they sustained significant losses related to investments in complex securities known as structured notes, according to a complaint filed Friday in U.S. District Court in Florida seeking to confirm the FINRA decision issued a day earlier.

Stifel plans to request that the award be vacated.

The couple first made claims against Stifel with FINRA in May 2023, alleging breach of fiduciary duty, negligence, negligent supervision, fraud, breach of contract and violation of the Florida Securities and Investor Protection Act. They had sought $1 million to $5 million in punitive damages, plus costs, fees and other relief that the panel deemed appropriate.

Stifel denied the claims, asked that FINRA award the DeLucas nothing, and sought expungement of material from broker Chuck Roberts’ record; Roberts wasn’t named in the FINRA case or related court complaint.

The FINRA arbitration panel last week found that Stifel must pay the DeLucas nearly $2 million in compensatory damages, including interest; pay Louis DeLuca’s business, UBS Inc.; over $2 million in compensatory damages, including interest; and pay all three claimants $9 million in punitive damages and $1.1 million in attorney’s fees, plus $100,000 in costs.

The FINRA panel denied Stifel’s expungement request.