UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 10, 2011
STIFEL FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
Delaware |
001-09305 |
43-1273600 |
One Financial Plaza
501 North Broadway
St. Louis, Missouri 63102-2102
(Address of principal executive offices, including zip code)
(Registrant's telephone number, including area code) (314) 342-2000
Not Applicable |
||
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
Stifel Financial Corp. Issues Response to the SEC Lawsuit
On August 10, 2011, Stifel Financial Corp. (the "Company") (NYSE: SF) issued a press release in response to the charges filed against Stifel, Nicolaus & Company, Incorporated by the Securities and Exchange Commission. A copy of the press release, the Company's amended cross claim against Royal Bank of Canada and related materials are available at the Company's website at www.stifel.com.
A copy of the press release is attached as exhibit 99.1 hereto and is incorporated herein by reference.
The information in Item 8.01 of this Report, including the information contained in Exhibit 99.1, shall be deemed "furnished" and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) |
Exhibits. |
Exhibit Number |
Description of Exhibit |
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99.1 |
Press release dated August 10, 2011. |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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STIFEL FINANCIAL CORP. | |
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Date: August 11, 2011 |
By: |
/s/ Ronald J. Kruszewski |
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Ronald J. Kruszewski |
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Chairman, President and Chief Executive Officer |
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EXHIBIT INDEX
Exhibit Number |
Description of Exhibit |
99.1 |
Press release dated August 10, 2011. |
4
Exhibit 99.1
STIFEL FINANCIAL'S RESPONSE TO THE SEC LAWSUIT
ST. LOUIS, August 10, 2011 - We are deeply disappointed by the misplaced action taken against us by the SEC. We will vigorously defend ourselves and believe we will prevail on the merits of the case.
The SEC's case against Stifel is centered around the issues of suitability and alleged misstatements.
With respect to suitability, the issue is whether it was suitable, in 2006, to sell a AA- rated investment to school districts who acknowledged the following in writing:
They were sophisticated and accredited investors. |
The investments were suitable. |
They read the offering materials and understood the risk of the investments. |
They could withstand the total loss of their investment. |
The Wisconsin school districts acknowledged in writing all of the above statements to Stifel and Royal Bank of Canada (RBC). In addition, RBC had an obligation to assess the suitability of these investments and, in fact, determined the investments were suitable.
With respect to alleged misstatements, the SEC chose to focus on isolated comments, taken out of context. Notably, the SEC's complaint failed to recognize the districts' written acknowledgments that the districts did not rely on any oral statements about the expected performance of the investments.
If there is an issue in this case, it is with the manufacture and management of the investments. The SEC chose to focus on Stifel's sales practices rather than the creation of the investments and their inherent conflicts. We provided the SEC with evidence that we believe clearly shows that RBC misrepresented and failed to disclose information concerning critical elements of the investments. We believe that inherent structural problems, as well as a failure to manage the investments, significantly impacted the performance of the investments which failed more than a year after Stifel ended its relationship with the districts. RBC made millions in undisclosed profits from the investments, many times what it represented to Stifel and the school districts. To date, we have been unable to locate a managed CDO, rated AA- and issued at the same time, that also failed, other than the ones created by RBC.
We believe the SEC filing demonstrates its failure to understand the real cause of the financial meltdown. Rather than focusing on the fundamental flaws in the creation and management of the product, the SEC is unfairly blaming Stifel as the placement agent.
Based on what we knew in 2006, the investments were suitable. With what we have uncovered in the meantime, we do not believe the product, created by RBC, was suitable for any investor. To allege in 2011 that Stifel should have foreseen the 2008 economic collapse, the structural flaws in derivatives which caused billions of dollars in losses, as well as the misrepresentations and conflicts Stifel believes RBC hid from it and the school districts, is 20/20 hindsight.
To review Stifel's amended cross claim against RBC and related materials, please go to www.stifel.com.
# # # # # #
Media Contact:
Dan Callahan, (314) 583-5050, dan@goelastic.com
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