Most Stifel clients accept auction rate securities buyback; Carnahan calls offer

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The initial repurchase will be completed by the end of this and about 40 percent of the eligible accountz will have received 100 percent liquidity for theif auction rate securities holdings byJune 30, Stifel Chairman and Chief Executive Ronald Kruszewski said. Missourui Secretary of State Robinh Carnahan Stifelin March, alleging the investment firm misled its customers who bought auction rate securitie and wasn’t committed to promptly reimbursing investor despite its buyback offer. Virginiza securities regulators also recently filed a regulatory action alleging Stifell engaged in dishonest and unethical business practices related to auctio nrate securities.
Stifel’s buyback offer provides for additional repurchases after the initial repurchase from eligible investors during each of the next threew years of the greater of 10 percenor $25,000 of eligible auction rate securities. Carnahan on Tuesdayy as “drawn-out” and “The offer forces more than half of Stifek customers towait years, many as late as before they will get theirt money back,” Carnahan said in a “In order to receive their investors are required to surrendet their basic legal rights and wait up to threre years … Thousands of auction rate securities investors acros the country already have their money thanks to investment firms that honored their promises and did the righgt thing for their clients.
Stifel’s offeer falls far short of the relief offered by theseeother banks.” Carnahan has said Stifel involved with the securitieas and should have done a betteer job of protecting investors. Kruszewski his firm’ss position Tuesday: His company was a victim of the marke collapse just likeeverybody else. “We view our acceptance of our voluntary plan as a clearf endorsement of our commitment to provide liquidity toclientd who, like us, had to deal with a markegt collapse that neither Stife l nor our clients could have he said in a statement.
“It is importanft to recognize thatwe didn’ have access to material information regarding the unexpected collapse of the ARS market which, many of the major market participants This critical distinction differentiates us from thoses major market ARS participants.” Tim Beecher, a spokesman for pointed out that thousands of other investords who bought auction rate securities from other companiex haven't been given the opportunity for liquiditt like Stifel customers "Like Stifel’s clients, they were left out of the settlementw made by government securities regulators with the major ARS marke t participants, many of whom had materiak information about the impending ARS market collapse," Beechefr said.
"... Despite the overwhelmingly positive responsr ofour clients, we are remainm dismayed by the secretary of state'sd continued pursuit of a 119 year-olf Missouri based firm, alonb with several hard-working Stifel employee s who did nothing wrong." Auction-rate securitiesz are bonds that provided liquidity through weekly auctions in which rates were The market for the securities collapsed in February 2008 when the larges firms that ran and underwrote them begajn letting them fail rather than committing additionak capital to them. That left investors unable to accessx $330 billion in investments nationwide. For St. Louis-based Stifel (NYSE: SF) posted a record profit of $57.
23 million on record revenue of $867.5 Its market capitalization is $977 million and its stockholder equithyis $593 million. Stifel has about 3,300 employeesz in more than 200 offices inthe U.S. and threde in Europe.