Raymond James (RJF) Hit with a $925,000 Award in Auction Rate Securities (ARS) Case

Rex and Sherese Glendenning were awarded $925,000 in an arbitration case they filed against Raymond James (FINRA# 09-00826; Rex Glendenning and Sherese Glendenning v. Raymond James & Asociates and Larry C. Milton). The couple said that the broker, Larry Milton, out of the Ft. Worth office, never explained what auction rate securities were or the risk involved with them. They opened the account in January 2008 with proceeds from various certificates of deposit and their money invested in an auction rate security consisting of Jefferson County, AL Sewer Revenue Bonds. They thought their investment was as safe as cash. Unfortunately, the auction rate securities market froze in February 2008 causing investors to be unable to access their cash. The panel found Raymond James and Larry Milton jointly responsible for the losses sustained by them an ordered them to buy back the securities for $925,000. One of the three arbitrators registered a dissent to the award saying “My dissent is in the size of the award. I believe the award to the Glendennings should be $1.4 million instead of $925,000.” Since arbitration awards do not have to be unanimous, the award stands with the noted dissent.

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