Raymond James Complaints & Regulatory Actions

Raymond James Financial Services Inc. (“Raymond James”) (CRD # 6694) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors. At the Law Offices of Robert Wayne Pearce, we have investigated Raymond James, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.

If you believe you have a claim against Raymond James, you should strongly consider hiring an investment fraud attorney. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Can I Sue Raymond James Financial Services Inc.?

If you’ve lost money caused by Raymond James and/or its employees’ misconduct then the answer is, YES,  you can sue Raymond James but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding.  Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Raymond James in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Raymond James is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is Raymond James Financial Services Inc.?

The company was founded in 1968 and has been engaged in its broker-dealer and investment advisory businesses The genesis of Raymond James (CRD # 6694)  was in the early 1960s. Since then there have been several name changes and restructuring of the company. It is now headquartered in St. Petersburg, Florida, and operates a full service broker-dealer and investment advisory firm with multiple subsidiaries providing different financial service services. Its independent broker-dealer arm has grown through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 3000 Raymond James branch offices with over 7600 registered representatives in every state.  It is now one of the largest broker-dealer and investment advisory firms in the United States.

Raymond James Financial Services Inc. Has Many Different Regulatory Problems 

Raymond James’ rapid growth has not been without consequences. There have been approximately 83 Federal, state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) ) for a violation(s) of investment-related rules or regulations. Over the years, there have been hundreds, if not, thousands of customer complaints filed against Raymond James for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record. 

We have reported and written about these regulatory problems and customer complaints over many years. Raymond James is a repeat offender: there are over 23 SEC and FINRA reported disciplinary proceedings citing the firm with one form of supervisory lapses or another in the last decade. The other 60 disciplinary proceedings were filed by state securities regulators throughout the United States.

A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS RAYMOND JAMES FINANCIAL SERVICES HAS FACED OVER THE YEARS*

Raymond James has been repeatedly censured, warned, and fined millions for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:

FINRA Sanctions Raymond James Over $8 million For Not Supervising 529 Plan Mutual Fund Share-Class Recommendations

During the relevant period, FINRA found that Raymond James & Associates, Inc. (“RJA”) and Raymond James Financial Services, Inc. (“RJFS”) each failed to establish and maintain a supervisory system, and failed to establish, maintain and enforce written supervisory procedures, reasonably designed to supervise representatives’ share-class recommendations to customers of 529 savings plans, in violation of MSRB Rule G-27(a), (b), and (c).

RJA and RJFS have agreed to pay restitution relating to the sale of Class C shares to certain 529 plan customers on the terms specified below. RJA has agreed to pay restitution in the estimated amount of $3,828,304 and RJFS has agreed to pay restitution in the estimated amount of $4,203,182, for an aggregate restitution payment of approximately $8,031,486. 

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Raymond James Sanctioned By FINRA For Cheating Charitable Organizations Out Of Sales Charge Discounts

FINRA investigated and found that Raymond James disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge (“Eligible Customers”) but were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. During the Relevant Period, FINRA also found that Raymond James failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers.

As a result, FINRA concluded that, Raymond James violated NASD Conduct Rule 3010 and FINRA Rules 3110 and 2010 and imposed sanctions, including a censure and order that Raymond James pay restitution to the customers in the total amount of $4,209,583.44. 

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Raymond James Fined $17 Million By FINRA For Lax Compliance Systems And Procedures

During the relevant period FINRA found that Securities America disadvantaged certain retirement plan and charitable During the relevant period, FINRA found that the 2 affiliated broker-dealers, Raymond James & Associates, Inc. (“RJA”) and Raymond James Financial Services, Inc. (“RJFS”), did not dedicate sufficient resources to compliance and supervisory systems and procedures to match their firms’ growth.  As a result, RJA and RJFS allowed certain red flags of potentially suspicious activity to go undetected or inadequately investigated. In addition to its AML deficiencies, both RJA and RJFS failed to establish, maintain and enforce a supervisory system reasonably designed to achieve compliance with Section 5 of the Securities Act of 1933 (the “Securities Act”) for transactions involving large blocks of low-priced securities. Finally, RJFS failed to establish and maintain reasonable written supervisory procedures with respect to its review of variable annuity exchange transactions and suitability reviews.  For these failures, FINRA censured RJA and fined it $8 million.  FINRA separately censured RJFS and fined that firm $9 million. 

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Raymond James Fined By FINRA $2 Million For Not Reviewing Emails

FINRA investigated and found that Raymond James Financial Services, Inc. (“RJFS”) did not have supervisory systems and procedures for reviewing email communications that were reasonably designed to achieve compliance with applicable legal requirements or appropriate for the firm’s business, size, structure, and customers. As a result, RJFS violated NASD Rules 3010 and 2110 and FINRA Rules 3110 and 2010 and was censured and fined $2 million. 

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Raymond James Sanctioned By FINRA For Charging Unfair Commissions

FINRA investigated and found that Raymond James Financial Services, Inc. (“RJFS”), failed to establish and maintain a supervisory system reasonably designed to achieve compliance with NASD Conduct Rule 2440 (Fair Prices and FINRA investigated and found that Raymond James Financial Services, Inc. (“RJFS”), failed to establish and maintain a supervisory system reasonably designed to achieve compliance with NASD Conduct Rule 2440 (Fair Prices and Commissions), resulting in customers being charged unfair and unreasonable commissions on equity transactions, in violation of NASD Conduct Rules 2440, 3010 and 2110, FINRA Rule 2010 and NASD IM-2440-1 for which the firm was censured and fined $200,000 and ordered to pay restitution of approximately $800,000 for a total of approximately $1 million in sanctions. 

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Raymond James Sanctioned By FINRA For Ignoring Ponzi Scheme

FINRA investigated and found that Raymond James Financial Services, Inc. (“RJFS”), failed to implement procedures that were reasonably designed to detect and cause the reporting of suspicious transactions in the accounts of its customer who used his brokerage accounts at RJFS to conduct a Ponzi scheme that resulted in losses of approximately $17.8 million to the individuals who provided funds to him.

During the relevant period, RJFS became aware of numerous red flags suggesting that 1 of its customers may have been engaged in suspicious or illegal activity. However, RJFS failed to adequately consider or review many of these red flags in light of its Anti-Money Laundering (“AML”) obligations. In many instances, the information about the red flags was not provided to the firm’s AML Officer for consideration and evaluation. After RJFS became aware of a suspicious flow of funds in and out of JR’s accounts, it still failed to conduct adequate due diligence or monitoring of JR’s accounts.

By failing to implement policies and procedures that were reasonably designed to detect and cause the reporting of suspicious transactions in the accounts of JR, RJFS violated NASD Rule 3011(a), and, by virtue of that violation, NASD Rule 2110 for which FINRA censured and fined the company $400,000. 

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Raymond James Fined $2.75 Million For Lax Supervision Of Branch Managersonitor Emails With False And Misleading Statements To Customers

FINRA investigated and found that Securities America failed to have a supervisory system, including written procedures, in place regarding electronic communications with customers that was reasonably designed to achieve compliance with applicable federal securities laws and regulations and with applicable FINRA and NASD Rules.  Specifically, FINRA found that Securities America’s email monitoring system did not identify numerous emails sent to FINRA in connection with an investigation of inappropriate conduct of one of Raymond James Financial Services, Inc. (“RJFS”) registered branch managers, discovered deficiencies in the firm’s supervisory system and written supervisory procedures (WSPs).  During the relevant period, FINRA found that the supervision of over 1,100 producing Branch Office Managers (branch managers) was the responsibility of only three sales managers, in cooperation with the RJFS Compliance Department. The Compliance Department relied primarily on exception report review and branch audits. Many of the activities commonly associated with daily supervision, however, were being conducted by the branch managers themselves, a classic case of the “Fox Guarding The Henhouse.”  This was a serious deficiency and yet FINRA only censured RJFS and fined the firm $2.75 million. 

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Raymond James Sanctioned By FINRA For Not Supervising Fee-Based Accounts

During the relevant period, FINRA found that Raymond James & Associates, Inc. (“RJA”) and Raymond James Financial Services, Inc. (“RJFS”) each failed to establish and maintain a supervisory system, and failed to establish, maintain and enforce written supervisory procedures, reasonably designed to supervise representatives’ opening of a fee-based brokerage accounts.

During the relevant period, a period of rapid growth in the firms’ fee-based brokerage business, RJA and RJFS continued to utilize existing procedures for review of account opening documents and account transactions, and did not establish and maintain a supervisory system, including written procedures, specifically designed to review and monitor their fee-based business.  In its investigation, FINRA discovered the 2 firms had never conducted an initial or periodic supervisory review of their customers fee-based brokerage accounts to determine whether such accounts were appropriate for the particular customers. RJA and RJFS also have never monitored their fee-based brokerage accounts for inactivity. As a result, RJA and RJFS violated NASD Conduct Rules 3010 and 2110.

In addition, the firms failed to provide their brokers with any criteria or guidance to determine whether a fee-based brokerage account was even appropriate for a customer and did not require their brokers to determine whether a Passport Brokerage or Ambassador account was appropriate for a customer before opening any of those type of fee-based accounts.  In addition, RJA and RJFS marketed Passport Brokerage accounts through the use of sales literature that failed to comply with NASD’s Advertising Rules. Accordingly, these communications with the public violated NASD Conduct Rules 2210(d) and 2110.  As a result of all these violations, the 2 firms was censured and fined $750,000 and ordered to pay restitution to customers who were charged fees for these accounts when they should not have been opened in the first place. 

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SEC Sanctions Raymond James Over $15 Million For Sales Practice Violations

The U.S. Securities and Exchange Commission (“SEC”) investigated and discovered Raymond James & Associates, Inc. (“RJA”) and Raymond James Financial Services, Inc. (“RJFS”) engaged in several violations during the relevant period.

In particular, RJA and RJFS financial advisors (collectively “RJ Advisers”) failed to conduct promised suitability reviews for certain advisory accounts, did not adopt policies and procedures reasonably designed to prevent violations concerning the suitability of fee-based advisory accounts, and overvalued certain assets that resulted in charging excess advisory fees; and RJA and RJFS (collectively “RJ Brokers”) failed to have a reasonable basis for recommending certain unit investment trust (“UIT”) transactions to brokerage customers, and failed to disclose the conflict of interest associated with earning greater compensation when recommending certain securities without providing applicable sales-load discounts to brokerage customers. These failures involved products sold and services provided to retail investors.

The SEC also found RJ Advisers’ Form ADV Part 2A brochures (“brochures”) and compliance policies and procedures provided that they would conduct reviews at specified intervals to determine if advisory accounts remained suitable for clients or if the clients’ assets should be moved to a brokerage account. RJ Advisers, however, failed to timely and adequately conduct these reviews and discover that they were 7708 advisory accounts that had no securities trading activity for at least 12 months when the RJ Advisers were paid over $4.9 million in advisory fees. 

The SEC also found Raymond James engaged in additional violations that affected both brokerage customers and advisory clients who owned UITs. In particular, the stockbrokers: (1) did not have a reasonable basis for recommending that certain brokerage customers sell certain UIT positions prior to their maturity dates and then repurchase newly-issued UIT positions, which generated approximately $5.5 million in excess sales charges and affected 2,044 brokerage accounts; and (2) failed to disclose their conflict of interest by recommending UITs without applying almost $660,000 in applicable sales-load discounts to brokerage customers in 5,468 eligible accounts, for which RJ Brokers received greater compensation. In addition, RJ Advisers used incorrect UIT valuations to calculate management fees for certain advisory clients, resulting in approximately $51,000 in excess advisory fees.

The SEC, unlike FINRA, did not take these violations lightly and ordered the brokerage and investment advisory firms to cease-and-desist from any further violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisors Act of 1940, censured, ordered them to pay in excess of $15 million in disgorgement of fees and commissions with interest, and civil monetary penalties. 

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Why Does Raymond James Financial Services Inc. Have So Many Regulatory Problems And Customer Complaints?

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers. 

Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.

These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.

Did Raymond James Financial Services Inc. Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Raymond James is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Raymond James without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By Raymond James Financial Services Today!

The securities attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Raymond James cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.

Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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