Stifel, Niclaus, and Francis Weller Censured After Excess Client Fees

The Massachusetts Securities Division has charged Cape Cod investment advisor Francis Weller, Jr. (CRD#: 4852071) and his company, Weller Asset Management, with violating their fiduciary duty to act in their clients’ best interest and failing to disclose conflicts of interest.

Weller and his company had an arrangement since 2009 with Missouri-based broker-dealer Stifel, Nicolaus & Company. One of its local representatives overcharged his Weller Asset clients and utilized Stifel’s resources.

In short, Weller required his customers to open accounts with Stifel. The firm’s local representative received full-service commissions, and Weller’s company also charged them additional management fees. These clients were being overcharged for services they could get elsewhere for less.

“Investment advisers have a duty to act in the best interest of their clients,” said Massachusetts Secretary of the Commonwealth, William Galvin. “By running this scheme, this adviser was allowing his clients to be overcharged for the benefit of his own business interests.”

The complaint states that Weller never disclosed this arrangement to his clients, and didn’t mention any conflict of interest in writing as required by the state.

The Securities Division is asking for Weller’s censure, a cease and desist order, revocation of his registration as an investment adviser in the state of Massachusetts, disgorgement of profits received from wrongdoing, and an administrative fine.

Separately, the Securities Division’s censure order for Stifel Nicolaus & Company includes fines of $300,000, a censure, and a requirement that the company cease and desist from conduct in violation of the Massachusetts Securities Act. Additionally, the company will be required to hire a consultant to audit all the trades made under the Weller arrangement. If any are found to be unsuitable, the firm will offer remuneration to the affected clients.

If your financial advisor charged you a management fee and also sold you high commission products or other fees, contact us to discuss your legal rights.

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today and let us know how we can help.