Stifel Nicolaus on Friday fired back at state securities regulators pursuing the investment firm.
The Colorado Division of Securities wants firms that marketed auction-rate securities as safe and liquid investments to make their Colorado investors whole.
Those debt markets froze up in February 2008, leaving investors unable to sell without taking a big loss.
Regulators filed a complaint seeking a revocation or suspension of Stifel’s license to operate in the state, along with other, less-extreme remedies.
“Stifel is shocked and dismayed that the state of Colorado would even contemplate these actions,” said CEO and chairman Ron Kruszewski.
For one, the firm said, Stifel’s 26 Colorado clients holding approximately $2.5 million in outstanding auction-rate securities have already agreed to participate in a voluntary repurchase program offered this summer.
Stifel also claims that, unlike larger investment banks that supported auction-rate markets, it had no way of knowing that a market that had operated with few failures for 25 years would completely collapse.
Fewer than 0.002 percent of the firm’s Colorado clients owned auction-rate securities, and Stifel is one of only a few “downstream” brokerages to offer a voluntary repurchase plan.
Stifel Nicolaus employs 94 people in seven offices in Colorado, with 12,000 accounts and more than $1.8 billion in investments.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
