Raymond James agrees to $5.95 million settlement with Vermont over alleged compliance failures

Raymond James Financial Inc. has reached a $5.95 million settlement with Vermont’s department of financial regulation over compliance violations tied to real-estate development projects at ski resort Jay Peak.

The brokerage firm agreed to pay $4.5 million to a federal receiver that will return money to foreign investors who backed the projects under a green card program, according to a statement Thursday from Vermont’s Commissioner Susan Donegan. The firm will also pay $1.25 million to Vermont’s general fund and $200,000 to reimburse the state regulator for the cost of its investigation.

In April, the Securities and Exchange Commission announced fraud charges and an asset freeze against Jay Peak and related businesses for allegedly misusing millions of dollars raised through investments solicited under the EB-5 Immigrant Investor Program.

The program, created by Congress in 1990, provides green cards to foreign residents who invest at least $1 million in a U.S. business that create jobs for U.S. workers. In high-unemployment or rural areas such as Vermont, the amount of investment required is just $500,000.

“Since the SEC’s seizure of the Jay Peak-related EB-5 projects, investors have been rightly concerned about possible recovery of funds,” Commissioner Donegan said in Thursday’s statement. “This settlement contributes to their restitution.”

The activity originated from a Miami branch office of Raymond James, according to Ms. Donegan, who said none of the St. Petersburg, Fla.-based brokerage firm’s Vermont offices or advisers participated in any improper activity tied to the enforcement matter.

“We are pleased to have reached this settlement with the state of Vermont,” Steve Hollister, director of public communications at Raymond James, said in an emailed statement. “Raymond James has a sustained history of conservative, long-term focused management with an emphasis on putting clients’ interests first, and we are committed to ensuring policies and procedures protect clients.”