Raymond James Financial

Raymond James has four main lines of operation: private client group, capital markets (made up of equity and fixed income capital markets as well as public finance), asset management group (made up of asset management services and Carillon tower advisers) and banking.[14][15][6]

In 2004, the SEC fined Raymond James Financial Services, Inc. $6.9 million for failure to supervise former broker Dennis Herula. Herula was accused of participating with others in a Ponzi scheme that raised about $44.5 million from investors in 1999-2000. Herula himself raised about $16.5 million of investor funds, most of which was later transferred to his wife's brokerage account at Raymond James. He was arrested in Bermuda and pleaded guilty to criminal charges of wire fraud and sentenced to 188 months in prison.[16][17][18][19]

In 2005, the National Association of Securities Dealers fined Raymond James $2.75 million for lax supervision of producing branch managers. The investigation began with one Raymond James manager, who worked from an office in her Wisconsin home, handling approximately 700 accounts and selling mainly mutual funds and variable annuities. The Wisconsin manager was accused of selling unsuitable aggressive mutual funds and variable annuities over a four-year period.[16]

On June 29, 2011, Raymond James announced an agreement to repurchase at par auction rate securities (ARS) sold to clients through its domestic broker/dealer subsidiaries prior to February 13, 2008. The agreement—reached with the Securities and Exchange Commission and with state securities regulators led by Florida and Texas—resolved more than three years of investigation related to activity in the ARS market. Without admitting or denying the allegations, the firm also agreed to pay a fine totaling $1.75 million to the state regulators, but was not fined by the SEC.

As a result of this agreement, a pre-tax charge of $45 million was recorded in the quarter ending June 30, 2011. This charge was a result of an estimate of the current fair value of the securities to be repurchased by the company being less than their par value. It is expected that the ultimate realized loss will be substantially less as issuers refinance or redeem these securities, interest rates rise and/or collateral values improve.

Raymond James sold $2.3 billion worth of ARS, underwrote $1.2 billion, and was the auction dealer for over $725 million. Since the $330 billion market for ARS crashed in 2008, at least 19 underwriters and broker-dealers were sued in class action suits.[20][21]

In September 2011, the Financial Industry Regulatory Authority ordered Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. to pay restitution of $1.69 million to 15,500 of their clients for charging excessive commissions on more than 27,000 securities transactions. The trades were made in client accounts between 2006 and 2010.

FINRA also fined RJA $225,000 and RJFS $200,000.[22]

On May 18, 2016 Raymond James was fined $17 Million for Systemic Anti-Money Laundering Compliance Failures. "RJA was fined $8 million and RJFS was fined $9 million for failing to establish and implement adequate AML procedures, which resulted in the firms’ failure to properly prevent or detect, investigate, and report suspicious activity for several years. RJA's former AML Compliance Officer, Linda L. Busby, was also fined $25,000 and suspended for three months.".[23] On December 21, 2017 Raymond James was fined $2 million for failing to reasonably supervise email communications. "FINRA found that during a nine-year review period, Raymond James’ email review system was flawed in significant respects, allowing millions of emails to evade meaningful review. This created the unreasonable risk that certain misconduct by firm personnel could go undetected by the firm. The combinations of words and phrases – otherwise known as the “lexicon” – used to flag emails for review were not reasonably designed to detect certain potential misconduct that Raymond James, in light of its size, structure, business model, and experience from prior disciplinary actions, knew or should have anticipated would recur from time to time. The firm also failed to devote adequate personnel and resources to the team that reviewed emails flagged by the system, even as the number of emails increased over time."[24]