Controversies Raymond James Financial

1 controversies

1.1 sec v. dennis herula
1.2 supervision of branch managers
1.3 auction rate securities
1.4 excessive commissions

controversies
sec v. dennis herula

in 2004, sec fined raymond james $6.9 million failure supervise former broker dennis herula. herula accused of participating others in ponzi scheme raised $44.5 million investors in 1999-2000. herula himself raised $16.5 million of investor funds, of later transferred wife s brokerage account @ raymond james. arrested in bermuda , pleaded guilty criminal charges of wire fraud , sentenced 188 months in jail.

supervision of branch managers

in 2005, national association of securities dealers fined raymond james $2.75 million lax supervision of producing branch managers. investigation began 1 raymond james manager, worked office in wisconsin home, handling approximately 700 accounts , selling mutual funds , variable annuities. wisconsin manager accused of selling unsuitable aggressive mutual funds , variable annuities on four-year period.

auction rate securities

on june 29, 2011, raymond james announced agreement repurchase @ par auction rate securities (ars) sold clients through domestic broker/dealer subsidiaries prior february 13, 2008. agreement—reached securities , exchange commission , state securities regulators led florida , texas—resolved more 3 years of investigation related activity in ars market. without admitting or denying allegations, firm agreed pay fine totaling $1.75 million state regulators, not fined sec.

as result of agreement, pre-tax charge of $45 million recorded in quarter ending june 30, 2011. charge result of estimate of current fair value of securities repurchased company being less par value. expected ultimate realized loss substantially less issuers refinance or redeem these securities, interest rates rise and/or collateral values improve.

raymond james sold $2.3 billion worth of ars, underwrote $1.2 billion, , auction dealer on $725 million. since $330 billion market ars crashed in 2008, @ least 19 underwriters , broker-dealers sued in class action suits.

excessive commissions

in september 2011, financial industry regulatory authority ordered raymond james & associates, inc. , raymond james financial services, inc. pay restitution of $1.69 million 15,500 of clients charging excessive commissions on more 27,000 securities transactions. trades made in client accounts between 2006 , 2010.

finra fined rja $225,000 , rjfs $200,000.