Erez Law recently filed a FINRA arbitration against Stifel, Nicolaus & Company, Incorporated related to investment losses with Chuck Roberts (CRD# 2064602), who was a registered representative of Stifel, Nicolaus & Company, Incorporated in New York, New York, and Miami, Florida, since 2016. He currently serves as a Managing Director of the CR Wealth Management Group. Erez Law represents several customers of Chuck Roberts and Stifel, Nicolaus & Company, Incorporated with similar claims.
The Erez Law client alleges the following in the newly filed FINRA claim:
Erez Law alleges that the broker churned the client’s account and charged millions in excessive commissions during a five-year period.
It is alleged that this staggering and abusive level of trades and commissions resulted in a very high annualized cost-to-equity ratio; the client would have had to have earned an annual return of more than 15% in his account just to break even before earning any return. In addition to this excessive cost-equity ratio, there were credit line interest charges.
Given the level of trading that Chuck Roberts employed in connection with this account, he was required to offer the client a more suitable, cost-effective fee-based account offered by Stifel, Nicolaus & Company, Incorporated, as it was in his best interest.
The complaint alleges that not only did his unsuitable strategy and illicit conduct caused the client to suffer significant losses in speculative securities, but he also deprived the client of the ability to participate in market returns.
The complaint alleged that Chuck Roberts engaged in reckless, unauthorized, and unsuitable short-term trading of speculative stocks and volatile stocks of companies, often with no profits. The complaint alleged that he, at times, recommended and implemented a high-risk and unsuitable strategy of trading in equities, including many high-risk and unsuitable stocks and selling covered calls on the same stocks. Examples of stocks in which he engaged in the same unsuitable and unauthorized short-term stock trading include:
- Fusion Acquisition/Moneylion
- Snap
- Arqit Quantum
- Aurinia Pharmaceuticals
- Uipath
- Sentinel One
- Toast
- Global E Online
- Taskus
- Ironnet
- Nio
- Sailpoint Technologies
According to the claim, he sold the client millions of structured notes by engaging in rampant unauthorized trading to generate outsized commissions.
Due to their complexity and similarities to options, securities regulators require brokerage firms such as Stifel, Nicolaus & Company, Incorporated to specifically approve clients for structured products or develop similar investor protection safeguards. The structured products he purchased in the client’s account were exotic, autocallable notes which offered little to no meaningful downside protection against a significant decline in the price of the underlying reference assets, which were often highly speculative and extremely volatile securities, such as:
- S&P Biotech ETF (tracks the Biotechnology Select Industry Index)
- Zoom
- DocuSign
- Twilio
- Roblox
- Palantir
- XBI (an S&P Biotech ETF that tracks the Biotechnology Select Industry Index)
The complaint alleges that he failed to adequately disclose the significant risks of the structured products he purchased in the client’s account and failed to adequately explain the structured products’ complex terms and trigger thresholds. His unsuitable strategy also involved recommending structured notes that involved the same high-risk linked securities, thereby concentrating the client’s account in certain securities and increasing the level of risk to which he was unknowingly exposed.
Examples of structured notes that resulted in losses include:
- JPMorgan Auto Callable Contingent Interest Note linked to Least Performing of KRE, XBI and XLK due 6/28/23
- JPMorgan Auto Callable Contingent Interest Note linked to Least Performing of KRE, XBI and XLK due 3/28/23
- BofA Contingent Income Auto-Callable Yield Notes linked to Least Performing of KRE, XBI and XLK due 3/2/23
- Citigroup Autocallable Contingent Interest Note linked to Worst Performing of KRE, XBI and XLK due 6/2/23
- GS Autocallable Contingent Coupon Equity-Linked Notes linked to DocuSign due 9/28/23
- Credit Suisse Contingent Coupon Autocallable Yield Notes linked to Lowest Performing of KRE, XBI and XLK due 1/26/23
- JPMorgan Auto Callable Contingent Interest Note linked to Square due 10/31/23
- JPMorgan Auto Callable Contingent Interest Note linked to Twilio due 10/31/23
- JPMorgan Auto Callable Contingent Interest Note linked to Roblox due 10/31/23
- JPMorgan Auto Callable Contingent Interest Note linked to Palantir Technologies due 9/28/23.
Broker Chuck Roberts Regulatory Complaint
He was the subject of regulatory sanctions in the past.
In 2010, the state of Illinois sanctioned him to pay a $1,000 civil and administrative penalty and fine related to trading in initial public offerings (IPOs). That same year, he was sanctioned by FINRA to pay a $40,000 civil and administrative penalty and he was suspended for four weeks related to allegations that he “had knowledge that a sales assistant and possibly others replaced customer email addresses with the sales assistant’s firm email address to facilitate the opening of online accounts and to lessen the number of communications that were received by the customers; therefore, trade confirmations were sent to the sales assistant rather than the customers although the customers continued to receive their monthly account statements, prospectuses, and 1099 federal tax forms by mail.”
Chuck Roberts Customer Complaints
He has been the subject of two customer complaints between 2010 and 2022, according to his CRD report. The most recent complaint included:
October 2022. “Claimant alleges negligence (breach of FINRA Rules), negligent misrepresentation, and breach of fiduciary duty in connection with an outside investment in a hedge fund and with investments purchased at Stifel.” The customer is seeking $1 million in damages.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Stifel, Nicolaus & Company, Incorporated may be liable for investment or other losses suffered by Chuck Roberts’ customers.
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.