SEC Charges Raymond James for Improperly Charging Retail Investors
The Securities and Exchange Commission recently instituted a settled order against three Raymond James companies for wrongfully charging advisory fees to clients with inactive accounts and for charging excess commissions to brokerage clients who invested in unit investment trusts (UITs).
According to the order, two Raymond James entities – Raymond James & Associates, Inc., and Raymond James Financial Services Advisors, Inc. – did not properly perform reviews of advisory accounts that did not have any trading activity for a year or more. This resulted in a failure to establish whether each client’s fee-based advisory account was suitable.
The order also finds that Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. used inaccurate pricing data for some UIT positions. According to the order, this resulted in the charging of excessive fees to clients. Further, the order finds that Raymond James companies recommended that clients sell UITs early (before they matured) and purchase new UITs without properly determining whether those recommendations were suitable. This resulted in the charging of excess commissions – i.e., if the clients had held the UITs to maturity before buying new UITs, they would have paid lesser commissions.
According to the SEC, Raymond James’ misconduct caused its clients to pay millions of dollars in unnecessary fees and commissions.
The order charges violations of: the Investment Advisers Act of 1940, Sections 206(2) and 206(4), and the Securities Act of 1933, Sections 17(a)(2) and (3). To settle the charges, the three Raymond James companies agreed to disgorge approximately $12 million in improper advisory fees and UIT commissions, plus prejudgment interest. They also agreed to pay a $3 million civil penalty and to be censured.
According to Raymond James’ website, Raymond James has over $800 billion in client assets, a market capitalization of nearly $12 billion., and nearly 8,000 financial advisors. On its website, Raymond James states that “[o]ur clients always come first” and that “[w]e must provide the highest level of service with integrity.”
If you feel you have been a victim of over-charges by Raymond James, please contact one of our Business Trial Group attorneys. Attorneys Jared Levy (561-812-1541) and Aiman Farooq (954-327-3041) will be happy to discuss your potential claims regarding any overcharges by Raymond James or any investment losses you suffered with a brokerage firm or registered investment advisor.
The Business Trial Group helps investors recover their financial losses on a contingency basis. You will never be charged hourly fees or expensive retainers. We are only paid if we successfully recover money for you.
Backed by the size and skill of 700 lawyers and offices nationwide, the Business Trial Group is part of the largest contingency law firm in the nation. We regularly battle against brokerage firms, investment advisory firms, and banks, and have helped investors recover tens of millions of dollars of losses.