FINRA Orders Raymond James to Pay $1.69 Million

The Financial Industry Regulatory Authority (FINRA) has announced that it has ordered Raymond James & Associates Incorporated (RJA) and Raymond James Financial Services Incorporated (RJFS) to pay restitution of $1.69 million to over 15,500 investors who were charged unfair and unreasonable commissions on securities transactions. The firms, RJA and RJFS, were also fined $225,000 and $200,000, respectively for using automated commission schedules that charged over 15,500 customers nearly $1.69 million in excessive fees in 27,000 transactions involving low priced securities.

FINRA said that the Raymond James firms had inadequate supervisory systems to detect the fairness of the commissions, including the kind of security being traded and the size of the order. Accordingly, FINRA required the Raymond James firms to assess and revise their automated commission schedules to conform to the requirements of the Fair prices and Commissions Rule. Furthermore, they were ordered to repay the $1.69 million in excessive charges and to pay for any additional excessive charges from November 1, 2010 through the date that each revised their automated commission schedules.

FINRA's Executive Vice President and Chief of Enforcement, Brad Bennett, said that "Raymond James failed to adequately monitor its supervisory systems and as a result, both Raymond James & Associates and Raymond James Financial Services overcharged thousands of customers on their securities transactions. Broker-dealers must ensure that their automated systems set commissions charges that are fair to investors."

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