FINRA has barred an ex-Stifel broker who has cost his former employer well over $100 million in arbitration fines over his recommendations of complex investment products.
Chuck A. Roberts, who ran a Stifel-affiliated practice called CR Wealth Management Group in Miami, was banned from the industry for not complying with the regulator’s investigation into his previous promotion of vehicles known as structured products, according to a disciplinary notice posted Wednesday by the Financial Industry Regulatory Authority. Roberts, who resigned from Stifel last month, was at the center of two giant recent arbitration decisions awarding clients millions after they accused him of making improper investment recommendations.
In October, a FINRA arbitration panel ordered Stifel to pay a pair of investors $14.3 million over Roberts’ advice on structured notes. The following month, a separate panel hit Stifel with a $2.4 million award over Roberts’ recommendations of structured notes.
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All that was topped in March, when Stifel was hammered with a $132.5 million penalty, also over Roberts’ work as a broker. That award, which includes $79.5 million in punitive damages, was the second largest in FINRA history. (The largest, for $400 million, was handed down in 2009 in a claim against Credit Suisse.)
Stifel went to court in May to challenge what it deemed a “shocking, runaway” penalty amount. Stifel has also settled four customer complaints against Roberts for about $31.7 million.
FINRA, the broker-dealer industry’s self-regulator, said in its disciplinary notice that Roberts had initially cooperated with its investigation into customer complaints about his investment recommendations. But he later refused to respond to a request FINRA sent in May seeking additional on-the-record testimony from him. Roberts later consented to an industry bar forbidding him to associate with any FINRA member in any capacity.
A Stifel spokesperson referred questions about Roberts to his lawyer, Susan Schroeder of WilmerHale in New York. Schroeder, a former FINRA head of enforcement, declined to comment.
Roberts, who has 35 years of industry experience, has roughly 20 outstanding customer complaints against him, according to his BrokerCheck page. Despite being banned from the brokerage industry by FINRA, he can still operate as a registered investment advisor under the Securities and Exchange Commission’s jurisdiction.
