Finra smacks Raymond James with $1.15 million penalty over compliance shortcomings

Raymond James Financial Services overlooked 'multiple red flags' related to the activities of two brokers, according to Finra.

The Financial Industry Regulatory Authority Inc. said Thursday it had reached a settlement with two broker-dealers under the roof of Raymond James Financial Inc. for a variety of compliance failures, including missing red flags when overcharging clients.

The two Raymond James firms agreed to Finra’s settlement without admitting or denying the regulator’s findings. A spokesperson for Raymond James declined to comment.

Finra said it fined Raymond James Financial Services Inc., the independent broker-dealer, $800,000 in the matter. According to Finra, from at least January 2012 through April 2018, Raymond James Financial Services “failed to reasonably supervise two registered representatives who engaged in a scheme to overcharge commissions to seven institutional customers, which they serviced as part of a team.”

“Although the scheme raised multiple red flags, [Raymond James Financial Services] failed to reasonably investigate them,” according to Finra. The firm also agreed to almost $49,000 in restitution.

Meanwhile, Raymond James Financial Services and Raymond James & Associates Inc., the broker-dealer for employee advisers, both failed from January 2012 to February 2020 to have a qualified principal authorize changes to the account name or designation on more than 7,500 equity orders, which breaks industry rules. Raymond James & Associates was levied a $300,000 fine to settle the matter.

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