{"id":249852,"date":"2025-10-30T01:16:13","date_gmt":"2025-10-30T01:16:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/249852\/"},"modified":"2025-10-30T01:16:13","modified_gmt":"2025-10-30T01:16:13","slug":"raymond-james-eyes-stifel-amid-legal-troubles","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/249852\/","title":{"rendered":"Raymond James Eyes Stifel Amid Legal Troubles"},"content":{"rendered":"

Stifel Financial recently paid nearly $3.4 million to settle three arbitration claims against the firm related to a former broker\u2019s sales of structured notes, according to BrokerCheck.\u00a0<\/p>\n

Those are the latest in a string of settlements and arbitration awards involving Chuck Roberts, a former Stifel rep who was barred from the industry in July for selling unsuitable investments to clients. Stifel\u2019s punishment included a FINRA arbitration award of nearly $133 million<\/a>, which was handed down in March. Stifel has filed a motion to vacate the award and is awaiting a decision.\u00a0<\/p>\n

Jeffrey Erez, an attorney representing investors in the cases against Stifel, said 17 additional cases are pending. He said every one of them involves the misrepresentation of structured notes and the unsuitability of these products for Roberts\u2019 clients.\u00a0<\/p>\n

The revelation of the additional claims follows news this week that Stifel has agreed to sell<\/a> its independent advisor channel, a small business unit with approximately 110 advisors and $9 billion in client assets, to Equitable.\u00a0<\/p>\n

However, sources close to the investment banking community and Stifel said the legal entanglements could prompt Stifel executives to accelerate a decision to sell the remaining business, and confirmed that Raymond James has been discussed internally as the likely buyer.<\/p>\n

Related:Ameriprise Adds $1.6B Advisor Team from Oppenheimer & Co.<\/a><\/p>\n

\u201c(The legal situation) in itself is making [Stifel CEO Ron Kruszewski] at least pause and say, \u2018Maybe we very seriously should consider partnering, merging, whatever you want to call it, more so than ever before,\u2019\u201d said one source close to Raymond James.\u00a0<\/p>\n

In a recent internal strategy meeting, Raymond James senior executives discussed buying Stifel, he said. An additional source close to the investment banking community confirmed that Raymond James executives were discussing a deal. However, it is unclear how formal the talks are between the firms or if an agreement is imminent.\u00a0<\/p>\n

\u201cIf you look at the core businesses of Stifel\u2014the wealth management, Stifel bank and the investment bank\u2014it fits extremely neatly right into the stack of Raymond James,\u201d he added. \u00a0<\/p>\n

As independent businesses in wealth management continue to grow faster than other financial service channels, scale becomes a competitive advantage, and there are increasingly few broker\/dealers large enough to acquire the middle-tier firms. \u00a0<\/p>\n

A Raymond James spokesperson did not return a request for comment.<\/p>\n

When asked about a potential deal with Raymond James, whose $32 billion market valuation makes it three times larger than Stifel, CEO Kruszewski replied with a written statement: \u201cI don\u2019t think Raymond James would sell to us, but if that ever changes, I\u2019d be interested.\u201d\u00a0<\/p>\n

Related:Primerica Accuses Osaic Of Running Corporate Raids ‘Under Cover of Darkness’<\/a><\/p>\n

During Stifel\u2019s earnings call last week, one analyst asked whether the firm was considering a sale, noting that it was an attractive asset in the growing wealth management space.\u00a0<\/p>\n

Kruszewski thanked him for the compliment, but said he did not see the need, \u201cother than maybe the short-term pop in a share price, which then eliminates a 135-year-old firm and a firm that\u2019s gaining market share as we have over the years.\u201d<\/p>\n

The 67-year-old CEO said he is often asked if his age is pressuring the firm to make a deal, but that\u2019s not the case. \u201cWe get phone calls once in a while,\u201d he said. \u201cI\u2019m not looking to do anything.\u201d<\/p>\n

Raymond James has the resources to buy the firm, according to multiple sources. Executives there had recently been in talks to acquire rival independent broker\/dealer Commonwealth last year. They were prepared to pay between $2.1 billion and $2.2 billion in cash, with contingencies in place. LPL Financial outbid them, paying $2.7 billion.<\/p>\n

\u201cNot only did LPL walk off the field with a prize, but it also left the Ray Jay senior executive team in a little bit of a bind with having developed a lot of their forward strategy by that point on the assumption of an exponential increase in their wealth management capabilities and how wealth management would then become the clear leading part of the business,\u201d the source said.\u00a0<\/p>\n

Related:Equitable Buys Stifel\u2019s $9B Independent Advisor Unit<\/a><\/p>\n

Buying Stifel could help fill that vacuum, sources said.<\/p>\n

The recent sale of Stifel\u2019s independent channel was likely done to present a cleaner, more coherent story to a potential buyer, he added.\u00a0<\/p>\n

\u201cThis is a deal in any instance where if you look at a company that seems more streamlined and strategically coherent after the sale of a certain business unit that just never really fit well with the rest of the business, yes, maybe it is just kind of part of a long-term standalone strategy, but just as frequently it\u2019s actually step one of a multi-step strategic realignment to drive a value creation event in the form of a deal for that company,\u201d he said.\u00a0<\/p>\n

An industry recruiter, who had also heard the two firms are in talks, agreed it\u2019s likely the independent channel was sold off to make the company more palatable to a potential buyer.\u00a0<\/p>\n

\u201cIt seems like it was just a half-hearted attempt to try the independent thing, and it didn\u2019t work. It doesn\u2019t make sense to have a 120-advisor independent unit if you\u2019re not going to invest in it,\u201d he said.\u00a0<\/p>\n

Seeing the firm settle the FINRA claims and sell off the independent unit further indicates executives are planning a move, the recruiter said.\u00a0<\/p>\n

\u201cIt seems like they\u2019re taking the steps necessary to clean everything up before a potential sale, and Raymond James would make a ton of sense,\u201d he said.<\/p>\n

\u00a0<\/p>\n

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