Ryan Beck & Co. (Florham Park, NJ), nka Stifel Nicolaus & Company (St. Louis, MO), agreed to pay a $100K fine and reimburse customers who purchased unit investment trusts (UITs) and qualified for, but didn't receive, the applicable sales charge discount - the latter based on a proposed plan the firm will submit to FINRA of how it will identify and compensate customers and a schedule
detailing the total dollar amount of restitution provided to each customer.

    WSP's Supe Policies, Staff Manuals:  All Are Lacking.   Ryan Beck is alleged to have failed to written supervisory pols and procedures for ensuring that discounts on eligible UIT purchases were correctly applied.  The WSP's had limited information re: UIT sales charge discounts, and omitted the fact that certain UIT sponsors permitted exchange discounts for purchases made with the proceeds from a UIT holding of another sponsor. 

FINRA notes that this was particularly relevant because the firm’s UIT business was almost exclusively with UIT sponsors that provided this sales charge discount.

Ryan Beck's procedures further are alleged to have lacked substantive guidelines, instructions, policies or steps for RR's, traders and their supervisors to determine if a customer’s UIT purchase qualified for, and received, a sales charge discount.  When firm customers received a sales charge discount, FINRA noted that RR and firm compensation diminished - an obvious conflict of interest - and, because of this, the firm needed to be particularly diligent in providing its staff with such guidance.

    Other Alleged Violations.   The firm allegedly:  (i) failed to provide appropriate discounts on both UIT rollover and breakpoint purchases;  (ii) failed to ID and appropriately apply sales charge discounts in certain top-selling UITs - leading to $20,000 in overcharges for just the sampled customers;  (iii) sold UITs that imposed a deferred sales charge that was generally charged upon redemption if a customer sold a UIT before the deferred sales charges were imposed;  (iv) failed to ensure that its customers’ UIT purchase confirmations included the required language stating that “on selling your shares, you may pay a sales charge. For the charge and other fees, see the prospectus;” and, (v) misstated on certain UIT confirmations that a sales charge discount had been applied when, in fact, it had not.  (FINRA Case #2008015700901)   [FINRA November Disciplinary Actions]