Raymond James Agrees to Pay $15 Million for Improperly Charging Retail Investors

Ad blocking detected

Thank you for visiting CanadianInsider.com. We have detected you cannot see ads being served on our site due to blocking. Unfortunately, due to the high cost of data, we cannot serve the requested page without the accompanied ads.

If you have installed ad-blocking software, please disable it (sometimes a complete uninstall is necessary). Private browsing Firefox users should be able to disable tracking protection while visiting our website. Visit Mozilla support for more information. If you do not believe you have any ad-blocking software on your browser, you may want to try another browser, computer or internet service provider. Alternatively, you may consider the following if you want an ad-free experience.

Canadian Insider Ultra Club
$500/ year*
Daily Morning INK newsletter
+3 months archive
Canadian Market INK weekly newsletter
+3 months archive
30 publication downloads per month from the PDF store
Top 20 Gold, Top 30 Energy, Top 40 Stock downloads from the PDF store
All benefits of basic registration
No 3rd party display ads
JOIN THE CLUB

* Price is subject to applicable taxes.

Paid subscriptions and memberships are auto-renewing unless cancelled (easily done via the Account Settings Membership Status page after logging in). Once cancelled, a subscription or membership will terminate at the end of the current term.

Washington, D.C.--(Newsfile Corp. - September 17, 2019) - The Securities and Exchange Commission today instituted a settled order against three Raymond James entities for improperly charging advisory fees on inactive retail client accounts and charging excess commissions for brokerage customer investments in certain unit investment trusts (UITs).

The SEC order finds that Raymond James & Associates, Inc., and Raymond James Financial Services Advisors, Inc., failed to consistently perform promised ongoing reviews of advisory accounts that had no trading activity for at least one year.  According to the order, because they did not conduct the reviews properly, they failed to determine whether the client’s fee-based advisory account was suitable.  The order further finds that the entities also misapplied the wrong pricing data to certain UIT positions held by advisory clients, causing them to overpay fees.

In addition, the order finds that Raymond James & Associates, Inc., and Raymond James Financial Services, Inc., recommended that their brokerage customers sell UITs before their maturity and buy new UITs without adequately determining whether these recommendations were suitable.  According to the order, the recommendations for early sales and purchases resulted in customers incurring (and the Raymond James entities receiving) greater sales commissions than would have been charged had the customers held the UITs to maturity and then purchased new UITs.  The order further finds that Raymond James also failed to apply available sales discounts for brokerage customers that rolled over their proceeds after selling a maturing UIT to purchase another one.

“Investment advisers and broker-dealers have on-going obligations to their clients and customers,” said C. Dabney O’Riordan, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “Raymond James’ failures cost their advisory clients and brokerage customers millions that will be repaid as part of this settlement."

The order charges Raymond James & Associates, Inc. and Raymond James Financial Services Advisors, Inc., with violating Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7, and charges Raymond James & Associates, Inc., and Raymond James Financial Services, Inc., with violating Sections 17(a)(2) and (3) of the Securities Act of 1933.  To settle the charges, the three Raymond James entities agreed to be censured and to disgorge approximately $12 million representing inappropriate client advisory fees and unit investment trust commissions, together with prejudgment interest, and to pay a $3 million civil penalty.  The three Raymond James entities have agreed to make distributions to harmed investors.

The SEC’s investigation was conducted by Salvatore Massa in the Asset Management Unit and New York Regional Office.  The case is being supervised by Jessica Weissman.  The staff received assistance from Mark Fowler of the Office of Compliance, Inspections and Examination from the Philadelphia Regional Office and Andrew Shelton, J. Matthew Jenkins, Deuce Tu, Michael Watson, Lundy Ben, Dmitry Malinskiy, and John LaVoie of OCIE’s Risk Analysis Examination Team.

Comment On!

140
Upload limit is up to 1mb only
To post messages to your Socail Media account, you must first give authorization from the websites. Select the platform you wish to connect your account to CanadianInsider.com (via Easy Blurb).