Monday,financial services holding company Stifel Financial Corp.(SF), said its subsidiary Stifel Nicolaus & Company Inc. will complete its repurchase of auction rate securities or ARS, by its retail investors on or before December 2011, six months earlier from the previously announced plan.
The accelerated ARS repurchase plan is part of an agreement Stifel reached with state regulators in Missouri,Indiana, Colorado and other members of the North American Securities Administrators Association Task Force or NASAA.
Stifel noted that as per the settlement, the states will share a fine amounting to $525 thousand. In addition to which,$250 thousand has to be paid to Missouri and $25 thousand to Indiana for the costs of investigation, expenses and other payments.
The settlement also allows the company to hire an independent consultant who will review the firm's supervisory and compliance policies and procedures solely for non-conventional investments.
The St. Louis based company completed its first repurchase of ARS as anticipated in June 2009, and plans to repurchase at par the greater of 10% or $25 thousand of eligible ARS by next month with similar repurchases next December and again in December 2011.
A supplemental repurchase will be made of any ARS remaining after the one in December 2010 for eligible investors who held ARS totaling $150 thousand or less as of January 1, 2009.
Stifel said that its investors who bought ARS through the company before the collapse of the ARS market on February 13, 2008 and continue to hold the ARS are eligible to participate in the repurchase program. Employee accounts become eligible in the last phase of the plans.
Ronald Kruszewski, chairman and chief executive officer said,"Since the collapse of the ARS market, issuer redemptions and restructurings as well as Stifel's voluntary repurchase plan have resulted in significant liquidity for many of our clients, reducing retail client holdings by nearly 50 percent. This accelerated and enhanced plan will ultimately provide liquidity to 100 percent of our ARS retail clients, about 1,200 in number, who represent less than one-half of one percent of all Stifel retail accounts."
SF last traded at $58.58, up $0.07 or 0.12% on the NYSE.
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