Skip to main navigationSkip to News Headlines
NJ Division of Consumer Affairs
Global Navigation
Division of Consumer Affairs
The State of New Jersey Office of The Attorney General (Dept. of Law & Public Safety) The State of New Jersey NJ Home Services A to Z Departments/Agencies OAG Frequently Asked Questions
OAG Home
OAG Contact
Division of Consumer Affairs Alerts and Recalls
Division of Consumer Affairs Alerts and Recalls
Office of the Attorney General Homepage Division of Consumer Affairs, Director
Division of Consumer Affairs, Director
Division of Alcoholic Beverage Control
Division of Consumer Affairs
Division of Consumer Affairs Highlights
Division of Consumer Affairs Topics in a A-Z List Format
Office of Consumer Protection (OCP)
New Jersey Bureau of Securities
Office of Weights and Measures
Legalized Games of Chance Control Commission
Alternative Dispute Resolution
Professions and Occupations List
Contact the Division of Consumer Affairs
Division of Consumer Affairs in Spanish
Division of Criminal Justice
Division on Civil Rights
Division of Gaming Enforcement
Division of Highway Traffic Safety
Division of Law
Juvenile Justice Commission
NJ Racing Commission
State Athletic Control Board
Division of NJ State Police
Victims of Crime Compensation Office
OPRA - Open Public Records Act
Download Free PDF Reader

Paula T. Dow,
Attorney General

Division of Consumer Affairs
Thomas R. Calcagni, Acting Director

Bureau of Securities
Marc B. Minor, Chief

For Immediate Release:
November 9, 2010
For Further Information Contact:
Jeff Lamm, 973-504-6327
 


Stifel Nicolaus to Repurchase $5.4 Million in Auction Rate Securities from N.J. Investors

NEWARK – The Office of the Attorney General through its Bureau of Securities has signed a final Consent Order that requires Stifel Nicolaus & Company, Inc., to repurchase auction-rate securities (ARS) from New Jersey clients to settle allegations that the firm’s securities dealers sold ARS without disclosing known risks of the ARS market.

Under the terms of the settlement, Stifel Nicolaus will repurchase $5.4 million in ARS sold to retail investors in New Jersey. Although marketed and sold to investors as safe, liquid, and cash-like investments, the ARS were actually long-term investments subject to a complex auction process that failed in early 2008, revealing illiquidity and lower interest rates than investors were promised.

This is the seventh such settlement that the Bureau has reached with firms that sold Auction Rate Securities to New Jersey investors. More than $1 billion of these assets have been repurchased by the firms, under terms of the settlements.

“Investors, through no fault of their own, suffered because of a lack of disclosure by these firms,” said Thomas R. Calcagni, Acting Director of the Division of Consumer Affairs. “Disclosure of material facts to clients is required by our state laws and we will act, as we’ve done here, when firms fail to comply.”

“The Bureau of Securities continues to seek relief for investors stuck with these unsuitable and illiquid products,” said Marc B. Minor, New Jersey Bureau of Securities Chief. “State securities regulators joined forces to resolve this matter on behalf of New Jersey investors. The states are on the frontlines in protecting investors and their hard-earned savings.”

The order also requires Stifel Nicolaus to pay a $15,381.10 civil penalty to New Jersey. This amount represents the state’s pro-rata share of a settlement negotiated by a multi-state task force of state regulators formed by the North American Securities Administrators Association (NASAA).

During the investigation, regulators discovered that Stifel Nicolaus securities dealers failed to adequately inform customers on the risks associated with buying auction-rate securities.

The investigation into Stifel Nicolaus’ role in the sale of auction rate securities is part of a larger state-led effort to address problems in connection with ARS investments. Early in 2008, state offices began receiving complaints from investors throughout the country. As a result, 12 states, including New Jersey, formed a task force to investigate whether certain Wall Street firms had systematically misled investors when placing them in auction rate securities.

The Consent Order sets forth the allegations by the BOS and the terms that were agreed to in principle in October, 2008.

BOS Investigating Attorney Peter C. Cole led New Jersey’s efforts in securing this settlement and protecting Garden State investors.

The Bureau of Securities can be contacted toll-free within New Jersey at 1-877-I-INVEST (1-877-446-8378) or from outside New Jersey at 973-504-3600. The Bureau's web site is located at www.njsecurities.gov.

View Consent Order

###

   
Contact Us | Privacy Notice | Legal Statement | Accessibility Statement
NJ Home Logo
Divisional: DCA Home | Complaint Forms | Proposals | Adoptions | Contact DCA
Departmental: OAG Home | Contact OAG | About OAG | OAG News | OAG FAQs
Statewide: NJ Home | Services A to Z | Departments/Agencies | FAQs
Copyright © State of New Jersey
This page is maintained by DCA. Comments/Questions: email

Page last modified: