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A Florida federal court judge affirmed FINRA’s $133 million arbitration award against Stifel, ending a year-long battle by the firm to overturn the penalty.

The decision by U.S. District Judge Darrin Gayles to uphold the arbitration award follows last month’s recommendation by a district court magistrate who also recommended that the court deny Stifel’s motion to vacate the penalty.

The court battle springs from a Financial Industry Regulatory Authority arbitration award issued in early 2025 concerning former Stifel broker Chuck Roberts, who invested the Jannetti family’s money. 

While the family sought a $5 million penalty, FINRA arbitrators opted for the far higher $133 million award, claiming they believed Stifel had “actual knowledge of the wrongfulness of the conduct” and knew there was a “high probability” the Jannetti family would face damages. Stifel argued the clients were “sophisticated” and knew the risks, and appealed FINRA’s decision last year. 

In early February, U.S. District Court for the Southern District of Florida Magistrate Judge Eduardo I. Sanchez argued that the award should stand, claiming the arbitration panel hadn’t exceeded its authority in awarding punitive damages, that Stifel wasn’t denied due process, and that the panel hadn’t refused to hear evidence, as Stifel claimed.

In the order filed Tuesday, Gayles agreed with Sanchez’s assessment, calling the analysis “well-reasoned,” and opting to adopt his report and recommendation in full. The full award was approved, and the judge granted the Jannettis’ motion for post-award interest (though he denied their push for sanctions).

According to Neil Shapiro, a spokesman for Stifel, the firm intends to continue the fight against FINRA's decision.

“Stifel maintains this was a runaway and unjust arbitration award that resulted from a biased arbitrator who prejudged the case and an unfair FINRA process,” Shaprio said. “We believe the award should not and cannot be upheld, and we plan to file a Notice of Appeal.”

According to the arbitration, Roberts’ “egregious conduct” included overconcentrating the Jannettis’ funds in structured notes and accounts “in limited industries,” as well as disregarding the firm’s “investment philosophy” when it came to managing the families’ accounts.

Stifel has had several settlements and arbitration awards involving Roberts, a former rep who was barred last July for failing to cooperate with a FINRA investigation into clients’ complaints that he made unsuitable recommendations.

In January, the firm paid an additional $850,000 to settle another arbitration claim related to the former broker’s sales of structured notes. The firm faces 23 pending customer disputes. 

In October, sources close to the investment banking community and Stifel said the legal entanglements could prompt Stifel executives to accelerate a decision to sell the remaining business, and confirmed that Raymond James has been discussed internally as a potential buyer.

When asked at the time about that report, Stifel CEO Ron Kruszewski replied with a written statement: “I don’t think Raymond James would sell to us, but if that ever changes, I’d be interested.” In other published reports, Kruszewski denied that the company was being sold to Raymond James.