Miller Law Group – Miller Stern Lawyers, LLC successfully litigated against Stifel, Nicolaus & Company, Incorporated and current financial advisor Kenneth Blumberg (CRD# 1585520) pertaining to a multitude of allegations including taking discretion in customer accounts without authority, over-concentration in sectors and individual securities, breach of fiduciary duty, unsuitable investments and other securities violations. Blumberg was registered with Stifel during the time of the events, located in the downtown Baltimore office of Stifel, Nicolaus & Company, Incorporated.
A FINRA arbitration panel has ordered Stifel Nicolaus & Company, Incorporated to pay more than $1.5 million to four customers who claimed that their Financial Advisor, Kenneth Blumberg (CRD# 1585520) unsuitably concentrated their portfolios in biotechnology and healthcare stocks at levels exceeding 80%. It was further alleged that while the customers’ portfolios were profitable, Mr. Blumberg failed to protect gains in the account, which was a violation of his duties as a fiduciary, after which time the value in the accounts deteriorated by approximately $1 Million. The case against Stifel asserted that it failed to properly supervise Blumberg. In the Arbitration, the customers recovered 100% of their losses plus approximately $500,000 in consequential damages reflecting what the accounts would have gained from the time they withdrew from Stifel as customers through the date of the Arbitration had the gains been protected and suitably reinvested.
“The concentration risk and asset allocation defects associated with this investment strategy should have been ongoing ‘red flags’,” attorney
Daniel J. Miller wrote in the Statement of Claim against Stifel and the broker that was obtained by
AdvisorHub. “Yet, if they ever took notice, they failed to contact claimants and failed to take any corrective measures.”
Securities & Stock Broker Fraud Blog
According to Advisor Hub customer complaints and litigation against brokerages will be heating up with the market turmoil. Most of the industry will likely conclude that coronavirus pandemic fears and oil wars between Russia and Saudi Arabia are the cause of the market drop and are totally out of anyone one person or companies control, however there can be broker misconduct involved in the level of losses because of things such as over-concentration and other individual account irregularities.