A magnifying glass scrutinizing financial documents, a myriad of people from various walks of life pondering their financial futures, and a looming question in the air: Is Raymond James in trouble due to unreasonable commissions?
The question remains as an investigation led by the Massachusetts Secretary of State has reviewed Raymond James’ business practices, and potential concerns appear to have grown regarding the firm’s history of possibly overcharging clients.
As an investor, the prospect of unreasonable commission charges are likely a concern and in all likelihood it is no different for investors at Raymond James? This broker-dealer financial institution is facing tough scrutiny from a state regulator for allegedly overcharging clients on transactions, and this may be costly in terms of potential regulatory fines and possible settlements.
If you are an investor with any concern or suspicion related to commissions, fees or charges related to your investment accounts , please contact the dedicated team at Haselkorn & Thibaut, P.A. an investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas. The dedicated team of lawyers and support staff is available to help guide you through the maze of these allegations and their implications, and review any concerns you might have related to Raymond James fees, commissions, charges, or similar issues related to any other broker-dealer firm.
With over 50 years of legal experience, multiple millions of dollars recovered for investors, and a strong track record of successful results for our clients that includes a 98% success rate, we stand firm in helping investors navigate through the complexities of investment fraud, negligence and improprieties and helping investors like you obtain the financial recovery you deserve.
Our detailed blog will walk you through some of these complex issues, shedding light on what this could mean for your investments and how you can potentially protect yourself. We are here to help you, and the easiest way is to call and schedule your free consultation today!
Key Takeaways
Table of Contents
- Based on regulatory filings and public records, it appears that Raymond James has been facing allegations of possibly charging clients unreasonable commission and/or fees. Cite to a back-up document??????
- It appears from public records that Raymond James has been the subject of allegations related to excessive fees that may have been charged and public filings suggest there have been significant fines imposed and the same public records appear to highlight the importance of potentially adding better controls and improved methods of oversight to prevent potential unfair trading practices in the future.
- Some investor clients of Raymond James may have potentially experienced unreasonable commission charges or fees, and if this is accurate, investors could be incurring unnecessary costs and damages.
- If true, could these allegations impact the reputation of Raymond James? Do these allegations raise concerns about the trustworthiness of the financial services provided by a firm like Raymond James? All this remains to be seen.
The Allegations Against Raymond James
Raymond James has faced allegations of charging clients with advisory accounts unreasonable commission fees. According to public records that do not appear to admit or deny such allegations, there have been regulatory fines and one or more settlements related to such allegations.
“Unreasonable” equity commission schedule charges
According to the public records, Raymond James had to pay over $12 million to settle such allegations (again, without admitting or denying the allegations). They were alleged to have charged “unreasonable commissions” and taken too much money from customers in fees and similar charges. The Washington State Securities Division made these allegations in the course of an investigation by the state securities regulators. You can read the public filing here.
Absent these allegations and steps taken by the state regulators, it is possible that Raymond James investor customers might still be paying too much money in fees.
Regulatory fines and settlements
Raymond James appears to be the subject of recent regulatory fines and settlements due to their having possibly charged unreasonable commissions. In one case, the settlement which did not include an admission or denial of the allegations, it appears that Raymond James agreed to more than $12 million in settlement charges for these alleged excessive fees.
The Washington State Securities Division conducted an investigation and found that many customers had paid high commissions. The National Association of State Securities Administrators (NASAA) also announced a $13 million settlement with Raymond James for similar allegations and they appeared to involve securities regulators from several states including: Alabama, Illinois, California, Massachusetts, and possibly other state securities regulators as well.
With respect to some allegations, it appears they may have involved Raymond James allegedly failing to disclose possible conflicts of interest by recommending Unit Investment Trust investments (UITs) without applying almost $660,000 in applicable sales-load discounts to the accounts for those brokerage customers across as many as 5,468 eligible accounts. The allegations go on to indicate that it is possible that Raymond James Brokers who may have handled those accounts may have received greater compensation as a result.
Information publicly available from FINRA from BrokerCheck (at the time of publication):
On January 30, 2023, Raymond James and Associates, Inc. (RJA), functioning as both a broker-dealer and investment adviser, and also serving as a clearing firm for Raymond James Financial Services Advisors, Inc., agreed to a Letter of Acceptance, Waiver, and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA). This agreement was due to its failure to transparently disclose potential conflicts of interest related to a minimum of 1,850,000 trade confirmations from January 2014 to May 2022. These conflicts encompassed the firm’s execution capacity in various roles (such as agency, agency cross, principal, and/or riskless principal) and the accuracy of trade execution details, including whether it was executed at an average price or whether its status as a market maker in the security was inaccurately disclosed or omitted. RJA consented to the findings and sanctions, which included a censure and a $300,000 fine.
Subsequently, on July 10, 2023, both Raymond James & Associates, Inc. and Raymond James Financial Services, Inc., each acting as a registered broker-dealer (jointly referred to as “Raymond James”), agreed to a multi-state settlement coordinated by the North American Securities Administrators Association (NASAA) and spearheaded by six states. The settlement addressed issues from July 18, 2018, to July 10, 2023, during which Raymond James applied a minimum commission charge to certain low principal brokerage transactions, resulting in unreasonable commission charges to those clients. The investigation revealed that an automated commission process led to equity trades generated that were subject to excessive commissions. Raymond James committed to reimbursing the impacted clients the excess commission amounts plus interest and making necessary adjustments to their equity commission schedule to prevent such issues in the future.
The firm also did not adequately oversee the application of the minimum commission charge to ensure that commissions were reasonable. In response to the examination findings, Raymond James updated the equity commission schedule to prevent clients from being charged commissions exceeding 5% of the principal trade value. Raymond James agreed to sanctions, including censure and a restitution payment of no less than $8,250,000 (plus 6% interest) to all impacted customers. Additional payments agreed upon included an administrative fine, further investigation costs by the lead states, $75,000 to the NASAA, and $100,000 to the Commonwealth of Massachusetts, totaling $4,200,000.
These cases highlight the importance of established and trusted brokerage firms utilizing adequate and proper levels of controls and oversight to prevent excessive commissions in order to protect investors from unfair trading practices. It appears that a number of state regulatory agencies may be hoping that the settlements with Raymond James might serve as a warning to other broker-dealers and financial institutions about the potential consequences of charging unreasonable commissions, and the risks of having inadequate supervisory and operational controls and policies.
Impact and Consequences
While it appears that investor clients of Raymond James who may have experienced damages or negative financial implications as a result of the alleged unreasonable commission charges, may have been reimbursed, it is unclear if these events are going to have any long-term impact on the brokerage firm or it’s reputation.
For investor customers in general, it is important to have a clear understanding of the commissions and fees being charged on your investment accounts and transactions. If you have any questions, it is always advisable for investor clients to consult with their financial advisor for a better understanding of the financial implications of the fees or commission charges associated with any products, transactions or investment strategies.
Financial implications for investor clients
While it appears that most if not all of the potential investor clients at Raymond James who may have incurred any allegedly high commissions and fees or unnecessary charges were reimbursed, it is important for investor clients at other broker-dealer firms and financial institutions to keep a close eye on the fees, commissions and other charges they are paying on their investment accounts and transactions.
If investor client are suspicious, their account paperwork is unclear or confusing, or their questions regarding such matter are not being addressed in a transparent fashion, or if they have any other issues related to commissions and fees, this could be a potential source of negligence, misrepresentation or impropriety and these could be damages that might be recoverable for investors.
These events and public filings highlight the importance for investors to carefully consider the commission structure and fees charged by their brokers and the need for investors to pay close attention, ask the right questions and stay aware and informed in a pro-active effort to protect themselves from potential financial consequences.
Potential Reputation impact for Raymond James?
These recent regulatory settlements appear to have impacted a substantial number of Raymond James investor clients and their accounts over many years. While the public records appear to reflect settlements and restitution or reimbursement, it is unclear whether or not these issues are sitting well with the investor clients. Some investor clients may look at this current status and chalk it up to a possible mistake and no harm, no foul, and appreciate the fact that it was addressed in the manner it was by Raymond James. Other investor clients may view this as a more significant concern that the firm or financial advisor they trusted inherently was not looking out for them, or possibly worse, took advantage of them in some manner and it is unclear if that is a risk that Raymond James may experience that could impact it’s reputation in the future.
Either way, and regardless of any of that potential impact, these events could be helpful in calling attention to similar issues and reminding investor customers to remain diligent and keep their guard up as the practices, policies, and procedures employed by some brokerage firms is not always adequate to protect their best interests.
Responses and Actions Referenced in the Settlements It appears based on the publicly available records related to these matters, some of which are referenced above, that among other aspects of the settlements with the state securities regulators, Raymond James has also agreed to consider implementing potential improvements to the compliance system and possibly considering operational changes in response to the allegations. It is hopeful that such improvements will help better protect the investor customers at Raymond James in the future, and that other broker-dealer firms will follow suit as well.
Overall, it is hopeful that these events will result in an improved level of oversight of brokers at Raymond James as well as other broker-dealers, ensuring that they provide accurate and fair charges to investor accounts and transactions, and provide proper valuable financial advice and otherwise act in the best interest of their investor clients at all times and in all phases of the investor customer relationship.
Investor Options To Recover Losses or Damages
As an investor, whether the damages or loss involves lost capital, bad investment advice, or unnecessary fees or commission charges, these are not necessarily “market decline” and they could be the result of negligence or impropriety on the part of the financial advisor or financial services firm. Financial services malpractice could potentially take many forms from traditional types of fraud, theft, or a series of investment strategies or products that are not in the investor client’s best interest.
If there are any red flags, or any issue that is simply unclear or not sitting well, if the answers to your questions are vague, or you own investment products or strategies that you do not understand, don’t “wait and see” if there are damages, ask an experienced investment fraud lawyer. Most reputable lawyers will offer a free consultation, and most can handle your claim or dispute on a contingency fee basis where the issues can be investigated in more detail, and if any matter is pursued on your behalf it is on a no recovery, no fee basis.
What is FINRA, Anyway?
Most investor customer open their accounts with financial services firms that are registered members of the Financial Industry Regulatory Authority (FINRA). This self-regulating organization not only serves as an organization that provides for licensure and registration of the broker-dealer firms and registered representatives (financial advisors) they also operate an independent investor arbitration forum.
For most investors, when they open their accounts and sign the agreements with the FINRA broker-dealer firms, the contracts and agreements contain a pre-dispute arbitration clause indicating that should there be any dispute between the firm and investor customer in the future related to the investments, the accounts, the financial advisor etc. that such dispute will be filed and processed through the FINRA Office of Dispute Resolution which operates a private, confidential arbitration forum to resolve such matters.
These arbitration disputes are handled much different than tradition state or federal court cases. While the rules appear simple enough in some respects, the procedure, discovery process and manner in which evidence is obtained and presented in these claims is different, and there are limited bases for any appeal. Investor customer should know in advance that they may get only one chance to prove their claim and as these cases are often processed much quicker and efficient compared to a court action, they better have their claim, their discovery and their evidence, as there won’t typically be a second chance.
For some investor customers, navigating through FINRA’s arbitration process can be a daunting task for the uninitiated. That’s where having an experienced investment fraud and FINRA arbitration lawyer in your corner can prove extremely valuable.
Haselkorn & Thibaut, P.A. Law Firm: Your Ally
The Haselkorn & Thibaut, P.A. law firm enjoys a reputation for getting results for clients nationwide. With a solid 98% success rate and having recovered multiple millions of dollars for investors over the years recovered for investors, our team’s record speaks volumes. Our seasoned investment fraud lawyers have the securities industry side knowledge and experience to delve into the complexities of each case, and pave the way for successful financial recoveries for our investor clients.
- Over 50 Years of legal exeperience.
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We stand by you, and your financial recovery is our victory. Our “No Recovery, No Fee” policy ensures that our interests are aligned with yours. We view these claims as a team effort with our clients, and if we do not get you results, we do not get paid.
Conclusion
The recent public filings related to matters involving Raymond Jamesand allegations related to potential issues of overcharging clients aside, these matters may well serve serve as a warning to other financial institutions about the potential consequences if/when unfair investment trading practices or other issues related to potential negligence or impropriety might occur in the future .
If you or your loved ones or family members have any concerns, questions or issues related to any of their investment accounts and the financial advisor and financial services firm are not providing adequate answers, please do not hesitate to call Haselkorn & Thibaut, P.A. law firm, remains your strongest ally and with a “No Recovery, No Fee” policy and a free consultation available at 1-888-779-0119, we are here to assist you!
