Stifel Financial Corp. said today that it plans to buy back all auction rate securities (ARS) held by its 1,200 retail investors, who purchased the securities before the ARS market collapsed in February last year. 
 
Stifel said it will start buying back these securities in June. It added that  in the next three years, its subsidiary, Stifel Nicolaus & Co., will offer to purchase all the ARS held at by the firm.

Stifel originally announced last Feb. 11 a voluntary plan where it intended to buy back up only 10% or $25,000 of ARS held by all  of its retail clients who bought the ARS from Stifel.

The firm had said that the process should be completed by June 30. After the initial repurchases, Stifel will start more repurchases from eligible investors in each of the next three years to be completed by June 30, 2012.

Stifel's expanded repurchase program strikes a balance between its clients' and shareholders' interests, Chief Executive Ronald J. Kruszewski said in a statement.

"As we have said all along, neither Stifel nor its clients had access to the information available to the major market participants regarding the impending collapse of the ARS market," Kruszewski said. "Had the major market participants disclosed to the entire marketplace the material facts known by them, Stifel would not have sold ARS to its clients."

He added that the the plan will offer liquidity to all 1,200 of the company's ARS retail clients. 
This voluntary plan to buy back the ARS is subject to redemptions, market conditions, and future events such as those that will affect Stifel's financial condition, the firm said.

Meanwhile,  Missouri Secretary of State Robin Carnahan called the move to buy back the ARS "too little, too late."

Carnahan expressed her concern about Stifel's list of events that the buy backs are subject to.“It worries me that Stifel made open-ended statements and no guarantees about getting clients full access to their money," Carnahan said in a statement. "Their clients deserve guaranteed repayments."

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