A federal district judge in Miami refused Tuesday to vacate a roughly $133 million arbitration award against Stifel tied to barred broker Chuck A. Roberts, accepting a magistrate judge's recommendation.
U.S. District Judge Darrin P. Gayles granted the plaintiff's request to confirm a Financial Industry Regulatory Authority arbitration award, denied Stifel's motion to vacate it and awarded the plaintiff interest, closing the case, according to the court order. Stifel plans to appeal.
FINRA has been arbitrating numerous customer disputes involving the former Stifel advisor, deciding this one last year with a $132.5 million award over his investment recommendations — notably, risky structured notes. FINRA barred Roberts from the industry in July after the broker refused to appear for on-the-record testimony.
In its recent annual report, Stifel disclosed that prejudgment interest had increased the award to approximately $143.5 million.
The case closed Tuesday arose from a FINRA claim that the Jannetti family asserted against Stifel alleging breach of fiduciary duty, negligence, negligent supervision, fraud, breach of contract and a Florida securities law violation. The magistrate judge had called Stifel's motion to vacate the award "frivolous."
A Stifel spokesman said via email Wednesday, "Stifel maintains this was a runaway and unjust arbitration award that resulted from a biased arbitrator who prejudged the case and an unfair FINRA process. We believe the award should not and cannot be upheld, and we plan to file a Notice of Appeal."
Stifel's bills to compensate clients for complaints against Roberts topped $195 million in early January.
AdvisorHub reported on the decision earlier Wednesday.
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