Raymond James Financial, Inc. Rotten Score Breakdown

In August 2024 the SEC announced enforcement actions against numerous broker-dealers and investment advisers for widespread and longstanding failures to maintain and preserve required electronic communications. Raymond James & Associates and Raymond James Financial Services were among the firms sanctioned. Employees used unapproved communication methods, including personal messaging platforms, to discuss business matters that federal securities laws required firms to preserve. The SEC stated that failures to retain these communications can hinder regulatory investigations and examinations by depriving regulators of potentially relevant evidence. Raymond James agreed to pay a $50 million civil penalty and undertook remedial measures intended to improve electronic-communications compliance and recordkeeping. Primary source: SEC — Twenty-Six Firms to Pay More Than $390 Million for Widespread Recordkeeping Failures: https://www.sec.gov/newsroom/press-releases/2024-98

The SEC and NASD brought coordinated enforcement actions against Raymond James Financial Services concerning failures to provide eligible customers with available breakpoint discounts on front-end-load mutual-fund purchases. The firm agreed to conduct a trade-by-trade review of qualifying transactions, identify customers who had not received appropriate discounts, locate those customers and provide refunds. Raymond James agreed to total penalties of approximately $2.595 million split between the SEC and NASD actions, together with a comprehensive customer remediation program. The SEC censured the firm and ordered it to cease and desist from future violations. Primary source: SEC — Raymond James Financial Services administrative proceeding: https://www.sec.gov/enforcement-litigation/administrative-proceedings/33-8374

The SEC instituted settled proceedings against three Raymond James entities for improperly charging advisory fees and commissions to retail investors. The SEC found that Raymond James failed to consistently conduct promised reviews of inactive advisory accounts, resulting in customers continuing to pay advisory fees without adequate assessment of whether fee-based accounts remained suitable. The SEC also found that Raymond James used incorrect pricing information for certain unit investment trust positions, causing advisory clients to overpay fees. Separately, Raymond James recommended that brokerage customers sell unit investment trusts before maturity and buy new UITs without adequately determining whether those recommendations were suitable. The transactions generated greater commissions than customers would have paid by holding the investments until maturity. The firm also failed to apply available sales discounts for some customers. Raymond James agreed to disgorge approximately $12 million in inappropriate fees and commissions, plus prejudgment interest, and pay a $3 million civil penalty. Primary source: SEC — Raymond James Agrees to Pay $15 Million for Improperly Charging Retail Investors: https://www.sec.gov/newsroom/press-releases/2019-178