SEC Bars Stifel Nicolaus Stockbroker For Fraud
Jon Brett Schmidhammer of Dublin Ohio a stockbroker formerly employed by Stifel Nicolaus Company Inc. has been barred by Securities and Exchange Commission (SEC) from being a stockbroker or investment adviser representative or otherwise associating with securities broker dealers or investment advisors according to an Order Instituting Administrative Proceedings Pursuant To Securities Exchange Act of 1934 Section 15(b) and Investment Advisers Act of 1940 Section 203(f) based on findings that Schmidhammer pleaded guilty to engaging in fraudulent securities practices. In the Matter of Jon B. Schmidhammer Administrative Proceeding File No. 3-18557 (June 28, 2018).
The SEC Order noted that Schmidhammer pleaded guilty to engaging in a second degree felony, unlawful securities practices. State of Ohio v. Jon B. Schmidhammer Case No. 16-CR-004165 (Ohio Com. Pleas Mar. 14, 2017). Accordingly, Schmidhammer was sentenced to jail and ordered to pay $196,387.25 to an individual who he defrauded in violation of Ohio Revised Code Section 17.044. Ultimately, SEC considered Schmidhammer’s guilty plea as justification to bar Schmidhammer from the securities industry.
This is not the first time that Schmidhammer has been sanctioned by a regulator for engaging in misconduct in the securities industry. In particular, Schmidhammer has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon accusations that Schmidhammer neglected to cooperate with FINRA’s information request that presumably concerned the charges to which Schmidhammer later pleaded guilty. Case No. 2016050951601 (Dec. 5, 2016). Apparently, around the time Schmidhammer was criminally charged; FINRA requested that Schmidhammer provide information to the regulator. Apparently, Schmidhammer’s failure to comply led FINRA to initially suspend him in all capacities on September 26, 2016 under Rule 9552(h). FINRA confirmed that Schmidhammer was provided until December 4, 2016 to request that his suspension be lifted; however, Schmidhammer did not comply with the regulator by the deadline. As a result, Schmidhammer was automatically barred by FINRA in all capacities on December 5, 2016.
Moreover, Schmidhammer has been fined $10,000.00 and censured by American Stock Exchange according to a Stipulation and Consent Order containing findings that Schmidhammer impermissibly extended a customer credit relating to the satisfaction of the customer’s margin requirements; and made misleading statements to the firm concerning his activities to conceal this impermissible extension of credit. Case No. 03-21. American Stock Exchange found Schmidhammer’s conduct violative of Exchange Rule 345(A)($).
FINRA Public Disclosure also confirms that a customer initiated investment related arbitration claim regarding Schmidhammer’s activities was settled for $499,000.00 in damages supported by allegations that the customer’s funds were converted; fiduciary duties that were owed to the customer had been breached; contractual obligations to the customer had been breached; equity transactions ran afoul of Ohio Securities Act; unauthorized trades were executed in the customer’s account; and the customer’s account was managed in a negligent manner while Schmidhammer was associated with Stifel Nicolaus Company Inc.. FINRA Arbitration No. 16-02983 (Feb. 10, 2017).
Schmidhammer’s registration with Stifel Nicolaus Company was terminated on July 29, 2016 founded on accusations that Schmidhammer had been arrested for potentially stealing from a customer of the firm.