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On Tuesday, Carnahan called on St. Louis-bases Stifel Nicolaus, a unit of SF), to buy back all of the illiquix securities that hundreds ofinvestors hold. Auction-rate securities are investments for whicy the interest rate isreset regularly. Stife Financial said last month that it wouldcspend $35 million to $40 million to buy back some of its customers’ auction-rate securities. On Friday, it said it may buy back “Stifel’s offer is inadequate, and theifr vague statement suggestingthey ‘mayu increase the amount’ has risked the credibility they have with theid customers,” Carnahan said in Tuesday release.
“I have heard from dozens of investors who desperately need to know when they will have accesa totheir savings. Aftert many other banks have done the righr thing and made theirinvestore whole, it’s time for Stifel to step up to the Stifel said it would offer to repurchased the greater of 10 percent or $25,00o0 of auction-rate securities held by each retai l client who bought them at Stifel befores the auction-rate securities market collapse a year ago. About 1,200 retail client accounts hold auction-rate securities, and about 40 percen of these accountshold $25,000 in auction-rate securities, so they will received 100 percent liquidity.
The remaining 60 percentg will get between 10 percent and 50 Stifel has saidit didn’t have as much knowledge as the largefr firms of the impending market collapse so it shouldn’tg have to buy back all the , an affiliate of , owned by Kansas City-bases (Nasdaq: CBSH) . In Carnahan reached a $9 billioj agreement with that returned money to morethan 40,000 Although these companies never admitted wrongdoing, Carnahan’s office suggested that investors were mislef about the risk involved in auction-rates securities.
The market collapsed in February 2008 when investorsx became alarmed at the prospect of corporate borrowers coveringf debt service onthe securities, leavingv investors unable to access $330 billiom in investments nationwide. Stifel Financial is led by Chairma and Chief ExecutiveRonald Kruszewski. The company has about 3,30p employees in more than 200 officeas in the United States and threein
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