Stifel Nicolaus To Pay $42,000 Award To Investor

By Diana Barr | April 1, 2011

An investor who lost money more than a year ago in a Ponzi scheme run by a former St. Louis-area broker has been awarded more than $42,000 in damages and fees from Stifel, Nicolaus & Co. by a FINRA dispute resolution panel.

Barbara Bush Cook of St. Louis had filed a claim for $500,000 with FINRA (Financial Industry Regulatory Authority) in 2009 against the broker’s former employers, Stifel and AXA Advisors. AXA settled with Cook in January 2010 for an undisclosed amount.

Cook alleged in her claim that Neely “invested her nest egg in an outrageous, reckless and self-serving manner," and that "he eventually even converted some of her funds” through fraudulent investments, according to FINRA documents.

Stifel had denied the allegations. A company spokesman said Friday that the company had no comment on the award.

The former broker, Kenneth Neely of St. Peters, had directed his clients from two different brokerage firms to invest in a nonexistent investment club. Although he was employed with Stifel and later with AXA Advisors, Neely told his clients to make checks payable to Neely or his wife, regulators said.

After pleading guilty to one felony count of mail fraud, Neely was sentenced in February 2010 to three years in prison and ordered to pay $618,270 in restitution for the scheme. In July 2009, federal regulators had permanently barred Neely from operating as a broker.

The FINRA panel’s decision, finalized Thursday, awarded Cook $21,000 in compensatory damages, $11,375 in pre-award interest and $10,000 in attorney’s fees. Stifel also was assessed a $4,500 session fee by the FINRA panel.

Cook was represented by Bruce Oakes and Richard Fosher of Oakes & Fosher LLC of St. Louis.

Stifel, Nicolaus & Co. was represented by the company’s James Browning.

Stifel, Nicolaus & Co. is a subsidiary of St. Louis-based Stifel Financial Corp. (NYSE: SF), a holding company that provides banking, securities and financial services.