UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant To Section 13 OR 15(d) of the 
Securities Exchange Act of 1934

 
Date of Report (Date of earliest event reported):
April 1, 2011

 

STIFEL FINANCIAL CORP.
(Exact name of registrant as specified in its charter)

 



  
    
      
Delaware
(State of
      incorporation)
      
    
      
001-09305
(Commission File
      Number)
      
    
      
43-1273600
(IRS
      Employer
Identification No.)
      
 
One Financial Plaza
501 North Broadway,
St. Louis, Missouri 63102-2102
(Address of principal executive offices, including zip code)

 
(314)
342-2000
(Registrant's
telephone number, including area code)
 





  
    
      
    
      
Not
		Applicable
    
      
  
    
      
    
      
(Former name or former address, if changed since last
      report)
    
      
 
 
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General
Instruction A.2. below):



o   Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)


o   Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)


o   Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o   Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 





 



	
		
		

		Item 8.01
		
		
Other
		Events.
	


On April 1,
2011, Stifel, Nicolaus & Company, Incorporated ("Stifel Nicolaus"), a wholly
owned subsidiary of Stifel Financial Corp. (the "Company"), received a "Wells
Notice" from the staff of the Securities and Exchange Commission (the "SEC")
advising Stifel Nicolaus that the staff intends to recommend the filing of a
civil or administrative enforcement action against Stifel Nicolaus for possible
violations of the securities laws relating to its role in certain investments
made by five Southeastern Wisconsin school districts (the "school districts")
and other post-employment benefits trusts established by the school districts ("OPEB
trusts").  A "Wells Notice" is not a formal allegation nor a finding of
wrongdoing. Recipients of "Wells Notices" have the opportunity to respond to
issues raised in the staff's investigation prior to any decision on an
enforcement proceeding by the SEC.  Stifel Nicolaus intends to respond and
explain why it believes enforcement action is not warranted.
As previously disclosed in Item
3, "Legal Proceedings" in the Company's Annual Report on Form 10-K for the
period ended December 31, 2010, filed February 28, 2011, the Company had
received inquiries from the SEC and a state regulatory authority relating to the
Company's role in investments made in 2006 by the school districts in
transactions involving collateralized debt obligations ("CDOs"). Stifel Nicolaus
is fully cooperating with the SEC and the state regulatory authority in these
investigations and have provided information and testimony.  The Company and
Stifel Nicolaus were named in a civil lawsuit filed in the Circuit Court of
Milwaukee, Wisconsin (the "Wisconsin State Court") on September 29, 2008. The
lawsuit has been filed against the Company, Stifel Nicolaus, Royal Bank of
Canada Europe Ltd. ("RBC"), and certain other RBC entities (collectively the
"Defendants") by the school districts and the individual trustees for the OPEB
trusts (collectively the "Plaintiffs"). 
The suit arises out of purchases
of certain CDO by the OPEB trusts. The RBC entities structured and served as
"arranger" for the CDO. Stifel Nicolaus served as the placement agent/broker in
connection with the transactions.  The school districts each formed trusts that
made investments designed to address their OPEB liabilities.  The total amount
of the investments made by the OPEB trusts was $200.0 million. Since the
investments were made, the Company believes their value has declined
significantly and may ultimately result in a total loss for the OPEB trusts. 
The Plaintiffs have asserted that the school districts contributed $37.5 million
to the OPEB trusts to purchase the investments. The balance of $162.5 million
used to purchase the investments was borrowed by the OPEB trusts from Depfa
Bank.  The recourse of Depfa Bank, as the lender, is each of the OPEB trusts'
respective assets and the moral obligation of each school district. The legal
claims asserted include violation of the Wisconsin Securities Act, fraud, and
negligence. The lawsuit seeks equitable relief, unspecified compensatory
damages, treble damages, punitive damages, and attorney's fees and costs. The
Plaintiffs claim that the RBC entities and the Company and Stifel Nicolaus
either made misrepresentations or failed to disclose material facts in
connection with the sale of the CDO, and thus allegedly violated the Wisconsin
Securities Act. The Company believes the Plaintiffs reviewed and understood the
relevant offering materials and that the investments were suitable based upon,
among other things, our receipt of written acknowledgement of risks from each of
the Plaintiffs. The Wisconsin State Court denied the Defendants' motions to
dismiss, and the Defendants have responded to the allegations of the Second
Amended Complaint, denying the substantive allegations and asserting various
affirmative defenses. Stifel Nicolaus and the RBC entities have asserted
cross-claims for indemnity and contribution against each other. The Company
continues to believe, based upon currently available information and review with
outside counsel, that the Company has meritorious defenses to this lawsuit, and
intends to vigorously defend all of the Plaintiffs' claims.


 






 
SIGNATURE
 

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
 
 
 
 
 





  
    
      
    
      
STIFEL FINANCIAL CORP.
  
    
      
    
      
    
      
  
    
      
    
      
    
      
  
    
      

		Date: April 1, 2011
    
      

		By:
    
      
/s/ James M. Zemlyak
  
    
      
    
      
    
      

		James M. Zemlyak
  
    
      
    
      
    
      

		Senior Vice President, Treasurer and Chief Financial
  Officer