Stifel is suing a financial advisor for $450,000 it recently fired over a dispute about client trades — and all of this barely one month after the firm hired him.
Advisor Michael J. Iannarino joined Stifel’s Columbus, Ohio, branch on Aug. 30 as part of
It was a rare independent-to-employee move; Iannarino had previously run Cephas Capital Partners & Advisory, an RIA he founded in 2015.
Once at his new employer, Iannarino exercised an option to receive a $900,000 personal loan from Stifel that was contingent on being employed at the firm for 30 days. The promissory note Iannarino signed included a clause that required immediate repayment in the event his employment ceased voluntarily or involuntarily, according to the lawsuit. The loan had a 120-month repayment schedule, according to a copy of the agreement filed in court.
His tenure at Stifel, however, was short lived.
On Oct. 3, Iannarino and his branch manager clashed over his request “to do a block trade
with Charles Schwab for a particular stock for his Stifel clients,” according to the firm’s lawsuit filed in U.S. District Court for the Southern District of Ohio.
Schwab was the custodian Cephas used at his RIA, according to its last ADV form filed with the SEC.
-
The advisors also reject the wirehouse’s claims they violated non-solicitation agreements.
September 25 -
The firm claims it is also missing important documents related to a large institutional client.
September 20 -
The advisors say they violated no contracts and took no confidential client information when they resigned from the bank.
September 17 -
The advisors agreed not to solicit clients and to return confidential information to the bank.
September 5
Iannarino allegedly told the manager that Schwab offered a better price. Though she denied him permission and instructed him to only trade on accounts at Stifel, Iannarino made the trade anyway, Stifel claims.
Iannarino received the first half of his personal loan that same day: $450,000 transferred to his account at Stifel, which he later moved to a personal account outside the firm, according to Stifel.
He did not come in for work the following day, Stifel claims.
Dynasty, Raymond James and Stifel are among the biggest beneficiaries of recent advisor moves.
Iannarino did not respond to requests for comment. It was not immediately clear whether he had retained an attorney.
When his employment was terminated on Thursday Oct. 11, the promissory note's repayment clause kicked in, according to the lawsuit. He has not repaid the $450,000.
Stifel is asking a federal court to intervene in the matter. Without a court’s intervention, “Stifel may not be able to recover these loaned funds from Iannarino,” the firm claims.
The firm uses strong language in its lawsuit, emphasizing that “Iannarino was aware” of the promissory note’s obligations and terms.
“Yet, at the first sign of trouble with his employment, he immediately withdrew all funds from Stifel and moved them to the Iannarino accounts. Quite simply, he knew he was attempting to hinder, delay, and defraud Stifel and move the loaned funds out of Stifel’s reach,” the company claims in its court filing.
A spokesman for the St. Louis-based brokerage declined to comment on the lawsuit.
Stifel has been an aggressive recruiter, picking up a slew of advisors recently. Most of the new hires have come from wirehouses.
