Tuesday, March 3, 2009

Carnahan Calls on Stifel to Provide Investors with More Than Empty Promises

Press Release Robin Carnahan's Office - Missouri Secretary of State
JEFFERSON CITY, MO - Secretary of State Robin Carnahan today responded to a statement made by Stifel Nicolaus, Inc. on Friday, February 27 that it "may" increase the amount of frozen auction rate securities it will voluntarily repurchase from its clients, "depending upon future circumstances."

Hundreds of Missourians who trusted Stifel's advice on where to invest their life savings have been unable to access their money for over a year. On February 11, Stifel announced it would voluntarily buy back only 10 percent or $25,000 of the auction rate securities it sold to each of its clients.

"Stifel's offer is inadequate, and their vague statement suggesting they 'may increase the amount' has risked the credibility they have with their customers," said Carnahan. "I have heard from dozens of investors who desperately need to know when they will have access to their savings. After many other banks have done the right thing and made their investors whole, it's time for Stifel to step up to the plate."

Investors have continued to regularly contact the Secretary of State's office, frustrated by Stifel's public statements. One investor, a 45-year old man from Beaufort, Missouri commented: "Stifel announced the partial buy back three weeks ago, but all of the auction rate securities they sold me are still frozen. My broker has no information on when they plan to make good on their promise. I need my savings."

Last year, investment banks across the country agreed to buy back auction rate securities from their clients. In Missouri, Wachovia Securities and Commerce Bank worked with the Secretary of State's office to return $9 billion to over 40,000 investors. Investors report auction rate securities were pitched as "same as cash" or "like a money market," and did not realize they were holding long-term bonds until the market froze in February of 2008.

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