SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

       DIVISION OF
CORPORATION FINANCE

Mail Stop 7010
September 27, 2007
Mr. James M. Zemlyak Stifel Financial Corp. 501 N. Broadway St. Louis, Missouri 63102-2188
RE: Stifel Financial Corp.    File #1-9305
Form 10-K for the fiscal year ended December 31, 2006
 Form 10-Q for the period ended June 30, 2007

Dear Mr. Zemlyak:

We have reviewed the financial statements  and related disclosures in your filings
and have the following comments.  Where i ndicated, we think you should revise your
document in response to these comments.  If you disagree, we will consider your
explanation as to why our comment is inappl icable or a revision is unnecessary.  Please
be as detailed as necessary in your explanat ion.  In some of our comments, we may ask
you to provide us with supplemental info rmation so we may better understand your
disclosure.  After reviewing this inform ation, we may or may not raise additional
comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.
 Form 10-K for the fiscal year ended December 31, 2006

 Management’s Discussion and Analysis, page 21

 1. In order to increase tran sparency and allow reader s to better understand your
historical results, please provide in future  filings (including fo rms 10-Q) additional
clarification regarding your operating results.  In this regard, we note that, for the three
years ended December 31, 2006, you have experi enced increasing revenues but a decline
in net income.  While we understand that this  is due in part to your acquisition related
compensation, it appears that there may be othe r material factors that  contribute to this
trend which could be quantified or discusse d. For example, we note your disclosure in
your risk factors on page 11 that you have e xperienced significant pricing pressure in
areas of your business that impa ir your revenue and profitab ility. However, there does not
appear to be disclosure in MD&A that clearly and completely explains to readers the

Mr. James M. Zemlyak
September 27, 2007 Page 2 of 5   extent to which this factor has impacted your operating results on a consolidated and on a
segment basis. Also, the risk factors on page s 9 and 10 discuss the potential impact of
business integration costs, however there does not appear to be disclosure in MD&A that
clearly informs readers whether expected merg er benefits and synerg ies have been fully
realized. Further, it is not clear whether the company’s material acquisitions have had, or
are expected to have, a material impact on ope rating margins. If any of these factors have
had an immaterial impact on hist orical operating margins, then  that fact should be clearly
disclosed. See Section 501.12.b.3 of the Financial Reporting Codification.
 Core Earnings, page 25

 2. We note that you present non-GAAP financia l measures here and on page 23. Please
clarify for us how this measure can be used  by investors to appropr iately evaluate the
performance of your business. In addition, please tell us how you determined it was
appropriate to exclude the ac quisition-related charges but to include the revenue and
other expenses related to your acquisitions. Further, pl ease clarify for us how the
presentation of core earnings and core earnings EPS data is useful to investors given your
inclusion of the non-recurring NYSE gain. See Question 8 of the FAQ Regarding the Use
of Non-GAAP Financial Measures.  Liquidity and Capital Resources, page 31

3. We note the risk factor on page 13 con cerning liquidity risks. In future filings
(including forms 10-Q), please identify in  MD&A the key indicators of financial
condition that management uses in assessing liquidity. The discussion should enable a
reader to understand whether management ha s observed an increase or decrease in the
company’s liquidity position and the basis for that conclusion. Absent  such clarification,
a reader may not understand the relevance of the recurring negative operating cash flows
reported on your Statements of Cash Flow s. Please see Sections 501.12.b.1 and 501.13 of
the Financial Reporting Codification.  4. The liquidity risk factor on pa ge 13 references restrictions on the ability of the parent
to receive distributions from its subsidiaries . In future filings, pl ease revise MD&A to
clarify the significance of these restrictions. Also, please explain to us how you assessed
the applicability of the Schedul e I disclosures outlined in Ar ticle 5-04 of Regulation S-X.
 Legal Reserves, page 33

 5. We note the disclosures here and on pages 12 and 57 regarding lega l costs. In future
filings (including forms 10-Q), please disclo se whether such costs have materially
impacted operating results in any of the peri ods presented. Absent such disclosure, there
is a concern that investors ca nnot fully assess the materialit y of this risk and whether
management’s related critical accounting esti mates have been accurate in the past. See
Section 501.14 of the Financial Reporting Codification.

Mr. James M. Zemlyak
September 27, 2007 Page 3 of 5   Reserve for Doubtful Receivables, page 34

 6. In future filings (including forms 10-Q ), please quantify the portion of the asset
balance that is receivable from former empl oyees. Absent such clarification, an investor
cannot assess the extent to which the re serve covers the amounts due from former
employees. We also note the significant incr ease in the Balance Sheet account through
6/30/07 and the material diffe rence in recoverability risk between amounts due from
current and from former employees.      Consolidated Statement of Cash Flows, page 44

 7. Please tell us how you determined it was appr opriate to record changes in your drafts
payable account as an operating activity. Plea se include an analysis  of paragraphs 18-20
of SFAS 95.  8. Please tell us how you determined that cl assification of “securities sold, not yet
purchased” as an operating activity is consiste nt with the apparent financing nature of
such transactions. Please include an an alysis of paragra phs 18-20 of SFAS 95.
 9. In future filings, please revise the “i nvestments” accounting policy disclosure to
clearly explain why all such transactions are cl assified as investing activities instead of as
operating activities. The basis for the differen ce in presentation, compared to “securities
owned”, may not be clear to readers given the su bstantial turnover in the “investments”
portfolio.    10. In future filings (including forms 10-Q),  please delete the su btotal line ($66,123 in
2006) in the operating activitie s section. See SFAS 95 and Item  10(e) of Regulation S-K.
 Note A. Summary of Significant Acc ounting and Reporting Policies, page 46

 11. Please provide us, and include in future filings, a comprehensive description of your revenue recognition policy in accordance with SAB Topic 13B.  In this regard, please
separately discuss your policies related to  your commissions, principal transactions,
investment banking and asset management a nd service fee revenue streams including the
time period over which revenue is recognized  and what specific accounting literature you
considered in formulating your accounting pol icy.  Please also address the following:
• Tell us if you perform services in which you earn revenues only upon the
successful completion of a transaction and, if so, please also tell us how
you account for the corresponding deferred expenses and if there have been any significant deferred expenses recognized for incomplete
transactions.
• To the extent that you recognize re venue from fees pursuant to a
contractual arrangement, tell us when payment becomes due under these
arrangements and how this imp acts the timing of your revenue
recognition.

Mr. James M. Zemlyak
September 27, 2007 Page 4 of 5
• Tell us if you are recognizing any in centive income that  is subject to
contingent repayments and, if so, pl ease tell us how you are accounting for
these contingencies and disclose the amount of incentive income that is
subject to repayment.
• Tell us how you are accoun ting for the value of a ny proprietary research
reports that are provided to clients at no charge.
• Tell us how you account for discounts on your commissions.

12.   In future filings (including forms 10-Q), please clearly disclose here or in MD&A
whether there are any material concentrations  in the company’s securities, investments,
loan, or receivable portfolio s. See the guidance in paragr aphs 15A and 15B of SFAS 107.
 Note T- Impact of NYSE/Archipelago Merger, page 62

 13. Please tell us specifically how you calcu lated the net gain on your sale of 51,900
shares of NYSE Group common stock and how the amount was impacted by a valuation
adjustment for the transfer restrictions on the shares received.   Item 9A. Controls and Procedures, page 65

 14. We note your disclosure that your Chie f Executive Officer and Chief Financial
Officer concluded that your di sclosure controls and procedur es were effective in alerting
them to material information, on a timely basi s, required to be included in your periodic
filings.  This statement does not conform to the definition of disclosure controls and
procedures, which is outlined in Exchange Ac t Rule 13a-15(e).  Please confirm to us, and
revise future filings to clarify, if true, that  your officers concluded that your disclosure
controls and procedures were effective to ensure that information you are required to
disclosure in reports filed under the Excha nge Act is recorded, processed, summarized
and reported as and when required and were effective for the purpos e of ensuring that
material information required to be in this  report is made known to management and
others, as appropriate, to allow timely d ecisions regarding required disclosures.
Alternatively, in future filings you may simply  conclude that your di sclosure controls and
procedures are effective or ineffective, wh ichever the case may be, without providing any
part of the definition.  This comment is also  applicable to your quarterly filings.
 Form 10-Q for the period ended June 30, 2007

Note G. Bank Loans, page 19
 15. Given that your bank loans balance is ma terial to your equit y, please tell us, and
clarify in future filings, the extent to which you have any material investments in
subprime mortgages.

Mr. James M. Zemlyak
September 27, 2007 Page 5 of 5        Please respond to these comments w ithin 10 business days, or tell us when you
will provide us with a response.  Please pr ovide us with a supplemental response letter
that keys your responses to our comment s and provides any requested supplemental
information.  Detailed letters greatly facilitate our review.  Please file your supplemental
response on EDGAR as a correspondence file .  Please understand that we may have
additional comments after reviewin g your responses to our comments.

 We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filings reviewed by the sta ff to be certain that they have provided all
information investors require.  Since the co mpany and its management are in possession
of all facts relating to a company’s disclosure , they are responsible for the accuracy and
adequacy of the disclosures they have made.     In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in their
filings;
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
 If you have any questions regarding these co mments, please direct them to Tricia
Armelin, Staff Accountant, at  (202) 551-3747, Al Pa vot, Staff Accountant, at (202) 551-
3738 or, in their absence, to the undersigned at (202) 551-3768.         S i n c e r e l y ,             John Cash          Accounting Branch Chief