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February 6, 2014

Stifel Nicolaus and Century Securities Ordered to Pay $1 Million

Stifel Nicolaus and Company, Inc. and Century Securities Associates, Inc. were ordered to pay over one million dollars by the Financial Industry Regulatory Authority (FINRA) due to alleged sales practice abuses in connection with the sales of leveraged inverse exchange traded funds (ETFs). Since ETFs are so complex, it is imperative for the brokers to have the proper education before recommending them to clients. FINRA discovered that both firms’ employees did not have a firm understanding of all the risks involved with ETFs. FINRA further found that Stifel and Century did not have the acceptable supervisory rules and guidelines in place that could have prevented the improper sales of the ETFs. According to FINRA’s press release, “Stifel agreed to pay a fine of $450,000 and to make restitution of nearly $340,000 to 59 customers. Century agreed to pay a fine of $100,000 and to make restitution of more than $136,000 to six customers.”

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