Raymond James is settling with Finra for more than $1.8 million over alleged failures to supervise reporting of customer complaints and monitor 4.7 million mutual fund purchases between 2012 and 2017.
According to a letter of acceptance, waiver, and consent the firm signed Aug. 29, Raymond James & Associates and Raymond James Financial Services “failed to reasonably supervise the firms’ reporting, and timely reporting, of customer complaints via Finra Rule 4530 filings and amendments to registered representatives’ Forms U4 and U5.”
In an email to InvestmentNews, a spokesperson at the firm said it had no comments to add.
Since January 2018 or earlier, the businesses did not take “reasonable steps” to make sure that staff would manually enter data into their electronic systems necessary for quarterly Finra filings, according to the Finra settlement letter. Finra uses such data to ensure its BrokerCheck reports are complete and that investors have full access to information about firms and advisors, the organization said.
“The firms also have not established reasonable controls to ensure that associated persons timely notify appropriate firm personnel of customer complaints,” the letter read.
Raymond James & Associates will pay a fine of $525,000 and about $26,000 in restitution plus interest. Raymond James Financial Services is paying $1.3 million and restitution of more than $85,000.
Earlier this year, two former Raymond James Financial Services advisors were barred from the securities industry by Finra. Those former advisors had not cooperated with the self-regulatory group and had previously been flagged by the company for selling unapproved products to customers.
The recent Finra settlement also includes a component over an alleged failure to “reasonably supervise at least 4.7 million mutual fund purchases that the firms’ representatives made directly with mutual fund companies on behalf of firm customers.”
In such cases, the two businesses in many cases did not capture the transactions in their automated surveillance systems, according to the settlement letter.
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