RJ probed on auction rate securities

Raymond James Financial Inc. said yesterday it was the subject of “ongoing examinations” by regulators over auction rate securities sold by reps and adviser to clients, who own about $1.3 billion worth of paper. In its quarterly report filed with the Securities and Exchange Commission, Raymond James of St. Petersburg, Fla., said the SEC and the New York Attorney General’s office were looking at its two primary broker-dealers, Raymond James & Associates Inc. and Raymond James Financial Services Inc., over auction rate securities. Over the past week, there has been a cascade of news about firms and their sales of auction rate securities. On Thursday and Friday, Citigroup Inc. Merrill Lynch & Co. Inc., both of New York, and UBS AG of Zurich, Switzerland said they agreed to buy back an astounding $36.7 billion worth of auction rate securities, the market for which collapsed in February in the midst of the credit crunch. Yesterday, New York state attorney general Andrew Cuomo said he was expanding an ongoing securities investigation to include New York’s JPMorgan Chase & Co., Morgan Stanley of New York and Wachovia Corp. of Charlotte, N.C. Over the past few months, Raymond James has been steadily decreasing its clients’ positions in auction rate securities. The company is also named in a class action similar to that filed against a number of brokerage firms alleging various securities law violations, Raymond James reported. At the end of June, Raymond James reported a head count of 4,716 reps and advisers across its various channels, an increase of 4.1% from a year earlier. The majority of those, 3,114, are independent-contractor reps. A company spokeswoman declined to elaborate on the SEC filing.