The Financial Industry Regulatory Authority (FINRA) ordered Raymond James & Associates, Inc. (RJA) and Raymond James Financial Services, Inc. (RJFS) to pay restitution of $1.69 million to more than 15,500 investors who were charged unfair and unreasonable commissions on securities transactions. FINRA also fined RJA $225,000 and RJFS $200,000.
FINRA said it found that from Jan. 1, 2006 to Oct. 31, 2010, the investment and financial planning firm and its subsidiary used automated commission schedules for equity transactions that charged more than15,500 customers nearly $1.69 million in excessive commissions on over 27,000 transactions involving, in most instances, low-priced securities. FINRA found that the firms’ supervisory systems were inadequate because the firms established inflated schedules and rates without proper consideration of the factors necessary to determine the fairness of the commissions, including the type of security and the size of the transaction.
“Raymond James failed to adequately monitor its supervisory systems,” said Brad Bennett, FINRA executive vice president. “Broker-dealers must ensure that their automated systems set commission charges that are fair to investors.”
FINRA required the firms to revise their automated commission schedules to conform to the requirements of the fair prices and commissions rule.
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