By Greg Andrews, The IBJ
Dave Knall, the star Indianapolis stockbroker sidelined by an insider-trading probe since December, has left McDonald Investments and is taking his 30-person team to rival brokerage Stifel Nicolaus.
The Knall team had overseen about $3.6 billion in assets from the McDonald office on East 96th Street, which will become a Stifel Nicolaus office by the end of the month. Last September, Barron's magazine ranked Knall and his partner, Jeff Cohen, fourth on its list of the nation's 100 top-producing financial advisers.
"We are hiring David and his team, and with that comes the opportunity for their clients to become clients of our firm," said Ronald Kruszewski, chairman and CEO of Stifel Nicolaus, the principal subsidiary of St. Louis-based Stifel Financial Corp.
The move occurs at a time securities regulators are continuing to probe allegations of insider trading in Galyan's Trading Co. stock before the company's $305 million sale last summer to Dick's Sporting Goods Inc.
In connection with that probe, Knall has been on a leave of absence from McDonald since Dec. 5, IBJ reported in January. In relation to the same matter, Jamie Knall, who worked with his father, has been on indefinite suspension from the firm since mid-November.
Regulators, including officials with the National Association of Securities Dealers, have refused to discuss the inquiry. They have not restricted either Knall from working with clients while the inquiry is pending.
Kruszewski said Stifel Nicolaus looked into the regulatory matters before extending the offer. "Based on my review, I am very comfortable having Dave," he said. Knall began work for Stifel on Tuesday. Jamie began work for the firm at the same time, NASD records show.
Knall's partner, Cohen, and other members of the team will transition to Stifel over the next month.
Neither Stifel nor McDonald officials would discuss financial terms of the deal.
The parting was "amicable," said Michael Monroe, chief communications officer for McDonald's parent, Cleveland-based KeyCorp. "The reason is because we negotiated a suitable arrangement that was mutually beneficial."
The deal swells the Indianapolis presence of Stifel Nicolaus, a mid-sized investment firm with 88 offices, most of them in the central United States. Its only Indianapolis presence previously was a north side office with about a half-dozen employees.
KeyCorp's Monroe said McDonald will retain its other Indianapolis office and plans to grow here.
Copyright © IBJ Corp. 2005.