Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of brokerage Stifel Financial (NYSE: SF) were getting pummeled by investors today, falling as much as 19% in intraday trading on heavy volume.

So what: On a day like today, it really doesn't take much in the way of bad news for a stock to fall. But Stifel's stock is being pressed by more than the broad market downdraft. The Securities and Exchange Commission has filed a suit against Stifel over $200 million of notes tied to synthetic collateralized debt obligations that the broker sold to multiple Wisconsin school districts in 2006.

Now what: From the view of a non-legal-expert (that's me), the picture doesn't look too good for Stifel. While it's no crime to sell an investment that doesn't perform, it is when you've given your client misleading information about the investment. The latter is exactly what it appears -- or is "alleged" for the lawyers out there -- Stifel did in this case. For a financial company that succeeds on the extent to which clients trust it and give it their business, if Stifel finds itself on the wrong side of the verdict, the impact of the suit could go beyond the monetary hit.

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