FINRA Orders Raymond James to Pay $1.69 Million for Charging Unfair Commissions

Yet another example of “Fair Prices and Commissions Rule” violation……

FINRA has now ordered Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. to pay restitution of $1.69 million to more than 15,500 investors who were charged unfair and unreasonable commissions on securities transactions. FINRA also fined the two entities $225,000 and $200,000, respectively, and is requiring the each firm to calculate and repay additional overcharges from Nov. 1, 2010, through the date that they each revised their schedule.

FINRA charged that from Jan. 1, 2006 to Oct. 31, 2010, the two companies used automated commission schedules for equity transactions that charged more than15,500 customers nearly $1.69 million in excessive commissions on over 27,000 transactions involving, in most instances, low-priced securities. FINRA found that the firms’ supervisory systems were inadequate because the firms established inflated schedules and rates without proper consideration of the factors necessary to determine the fairness of the commissions, including the type of security and the size of the transaction. See more…

Author: Dexter Johnson

The author is a an attorney who for the past 14 years has concentrated his practice in representing, successfully, investment advisers, broker-dealers, corporations and individuals who are subject to SEC, FINRA, State or other regulations and who may be the subject of regulatory examination, review or investigation. He formerly worked at the SEC. His regulatory and litigation experience has encompassed virtually every type of securities issue in the industry. He has also negotiated favorable outcomes in many of these matters for his clients.