Some MA Residents May Get Piece Of Raymond James Settlement

MASSACHUSETTS — Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. have been ordered to return $8.25 million plus interest to customers who were charged unreasonably high fees, according to a statement from Secretary of the Commonwealth William Galvin. A settlement agreement followed a multi-state effort to crack down on brokers overcharging investors.

An investigation found that the broker-dealer charged unreasonable commissions on more than 270,000 equity transactions during the past 5 years.

Affected Massachusetts customers will receive a total of $185,000 plus 6% interest. The state will receive a $100,000 administrative fine as well.

The settlement agreement states that Raymond James applied a $75 minimum commission charge, regardless of the reasonableness of the commission. The broker-dealer failed to have appropriate systems in place to stop overcharging of its customers. Many ended up paying over 90% of the principal amount.

“This isn’t the first time Raymond James has overcharged customers,” Galvin said in a statement. “In 2011, they paid more than $2 million in restitution and fines for conduct that was identical to this. It is clear from these actions that there is a continuing need for state regulators to work together to protect the best interests of investors.”

Raymond James has entered an agreement with state securities regulators and will offer restitution to customers charged more than 5% commissions on equity transactions in the past 5 years.

The broker-dealer must also change its supervisory and compliance apparatus concerning brokerage commissions, according to the statement.

The full settlement agreement is available here.