ASC sanctions Calgary man who violated previous settlement

Brokerage firm Raymond James is paying US$15 million to settle allegations with U.S. regulators that it improperly charged certain investors.

The U.S. Securities and Exchange Commission (SEC) settled with three units of Raymond James that will see the firm pay US$12 million in disgorgement and a US$3-million penalty to resolve charges that the firms overcharged certain clients and didn’t review inactive accounts to determine whether asset-based accounts were suitable.

The three firms — Raymond James & Associates, Inc., Raymond James Financial Services Advisors, Inc., and Raymond James Financial Services, Inc. — settled the SEC’s case without admitting or denying the allegations.

The SEC found that the firms didn’t conduct ongoing reviews of advisory accounts that had no trading activity for at least a year, and therefore didn’t determine whether the clients’ fee-based advisory accounts were suitable.

It also found that they applied the wrong pricing data to certain positions, causing clients to overpay fees, and that certain clients didn’t get available fee discounts.

“Raymond James’ failures cost their advisory clients and brokerage customers millions that will be repaid as part of this settlement,” said Dabney O’Riordan, co-chief of the SEC enforcement division’s asset management unit, in a release.

The SEC’s order notes that the firm launched a number of remedial efforts and also self-reported some of the issues.