© 2022 St. Louis Public Radio
Play Live Radio
Next Up:
0:00
0:00
Available On Air Stations

St. Louis-based Stifel, Nicolaus & Co. charged with defrauding school districts


View Larger Map

Updated 4:02 p.m.:

Stifel, Nicolaus & Co. has released a statement regarding the complaint, read the full text here.

The federal Securities and Exchange Commission has charged a St. Louis brokerage firm and a former executive with defrauding five Wisconsin school districts by selling them risky investments funded mainly with borrowed money.

The SEC complaint against Stifel, Nicolaus & Co. and former Senior Vice President David Noack was filed in federal court in Milwaukee Wednesday.

The Kenosha, Kimberly, Waukesha, West Allis-West Milwaukee and Whitefish Bay districts set up the investments to help pay for health and pension benefits promised to retirees. The districts used a $165 million loan from a Dublin-based bank and $35 million in tax dollars for the investments, which lost nearly all their value during the global economic crisis. The districts sued Stifel, Nicolaus & Co. and the Royal Bank of Canada, which put the deals together.

Lawyers for both sides did not immediately return calls seeking comment.

Send questions and comments about this story to feedback@stlpublicradio.org.