Erez Law recently filed a FINRA arbitration against Stifel, Nicolaus & Co., Inc.
Their customer alleges that James Killeen (CRD #2666093), who was a registered representative of Stifel, Nicolaus & Company, Incorporated in Pasadena, California, from 2009 to 2024. In February 2024, James Killeen’s employment with Stifel, Nicolaus & Co., Inc. was terminated.
The Erez Law client, who was an unsophisticated and inexperienced investor, alleges the following in the newly filed FINRA claim:
The Erez Law client had funds he obtained through a settlement that were intended to sustain him financially for the foreseeable future. He relied entirely on James Killeen to provide professional and suitable investment recommendations in the Erez Law client’s best interest.
Erez Law alleges that, based on James Killeen’s representations and assurances, the Erez Law client transferred $1,251,600 to Stifel, Nicolaus & Co., Inc. It is alleged that James Killeen recommended and implemented a grossly unsuitable strategy of investing the vast majority of the Erez Law client’s funds in long-dated agency bonds with historically low yields. Agency bonds are debt securities issued by U.S. government-sponsored enterprises like Fannie Mae and Freddie Mac and function like loans tied to mortgages, where the investor receives interest and principal.
According to the claim, the agency bonds that James Killeen recommended and sold to the Erez Law client had maturities all the way through 2055, when the Erez Law client would be 76 years old.
The bonds that the broker recommended to the Erez Law client had long maturities and low coupons, which were destined for disaster when interest rates would inevitably rise. It is alleged that James Killeen’s strategy of over-concentrating the Erez Law client’s funds in long-dated low-coupon bonds only further served to increase the level of risk to which the Erez Law client was unknowingly exposed.
It is alleged that James Killeen failed to adequately disclose and explain the risks of his strategy to the Erez Law client. Erez Law also alleges that the broker failed in recommending investments that were required by the stated objectives and risk tolerance of the Erez Law client’s account.
Despite the Erez Law client’s Stifel, Nicolaus & Co., Inc. account as being coded as having an investment objective of “Growth and Income” and a “Moderate” risk tolerance, the broker failed to recommend primarily growth equities that would generate long-term capital appreciation or growth securities as an alternative. It is alleged that the broker failed to recommend a properly diversified portfolio with suitable equity allocation. James Killeen’s failure resulted in a massive loss of opportunity for the Erez Law client, for which Stifel, Nicolaus & Co., Inc. must be held accountable.
According to the claim, the Erez Law client initiated a discussion with James Killeen about diversification of his portfolio, to which the broker rejected any effort to diversify and assured the Erez Law client that he was in the right investments.
In April 2023, the Erez Law client deposited an additional $826,000 with Stifel, Nicolaus & Co., Inc. James Killeen recommended that the Erez Law client hold his existing bonds and buy additional long-dated agency bonds; the Erez Law client followed his recommendation.
According to the claim, only due to the Erez Law client’s insistence, $200,000 of the new funds was eventually invested in eight stocks in late 2023 and early 2024. This was too little and too late, as the damage was already done, and the client already suffered tremendous investment losses.
After the broker was terminated from Stifel, Nicolaus & Co., Inc. in February 2024, the firm informed the Erez Law client that it assigned Manny Lozano to serve as the Erez Law client’s broker of record. James Killeen contacted the Erez Law client and informed him that Stifel, Nicolaus & Co., Inc. fired him. In April 2024, the Erez Law client terminated his account with Stifel, Nicolaus & Co., Inc. and transferred his investments away. As of this time, the client’s accounts reflected approximately $260,070 in unrealized losses primarily due to the inevitable rise in interest rates from the unsustainable historic lows. The claim alleges that, in addition to the losses in the unsuitable and reckless bond strategy, the Erez Law client was deprived of participating in the appreciation in the equity markets. For example, the S&P 500 is up over 80% total return since November 2021.
The claim alleges that Stifel, Nicolaus & Co., Inc. must be held accountable for the damage it inflicted on the Erez Law client.
In addition to the case above, he has been the subject of two additional customer complaints, dating from 2020 to 2025, according to his CRD report, both of which were denied.
How to File a Claim Against James Killeen
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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