Finance and Economic

Stifel Financial Corp. says 95 percent of its clients stuck with auction rate securities have signed up for the firm’s three-year buyback plan. But Missouri Secretary of State Robin Carnahan calls that plan "drawn-out and inadequate," and she’s continuing her suit against the firm.

The case involves 1,200 Stifel clients whose investments were frozen early last year when the auction rate bond market collapsed. Clients now own $170 million in bonds they can’t sell, although the bonds are still paying interest.

Stifel, parent of the Stifel Nicolaus & Co. brokerage, has offered to buy back the investments at the original price over the next three years. About 40 percent of clients will have received all their money back when the first phase of the buyout is completed by June 30, the company said.

Ron Kruszewski, Stifel’s CEO, said the high client acceptance rate is a "clear endorsement" of the company’s buyback plan affordable health insurance kentucky. But Carnahan said clients signed up "not because it’s a good offer, but rather because Stifel has given them no other choice."
She is suing to force Stifel to buy back all the bonds immediately.

Stifel blames the situation on other, larger investment firms that ran the bond auction. Those firms knew there was growing danger of collapse and didn’t tell smaller firms such as Stifel, Stifel says.

Carnahan rejects that explanation and notes that 20 other firms have bought back the bonds from their clients.

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