On September 17, 2019 the SEC (The Securities and Exchange Commission) imposed an order against three Raymond James entities for improperly charging advisory fees on inactive accounts and charging excess commissions for investments, including unit investment trusts (UITs).
The SEC Order states that Raymond James & Associates, Inc., and Raymond James Financial Services Advisors, Inc., failed to perform review of advisory accounts which had no trading activity for at least one year.
Because Raymond James did not conduct the reviews properly, Raymond James failed to conclude whether the client’s fee-based account was suitable. The Order concluded that the entities also misapplied incorrect pricing to various UIT positions held by clients.
The Order further concluded that Raymond James & Associates, Inc., and Raymond James Financial Services, Inc., recommended sale of UITs before maturity and purchase of replacement UITs without evaluating suitability.
The SEC’s cease and desist order stated that from January 2013 through May 2018 Raymond James & Associates and Raymond James Financial Services Advisors:
• Failed to engage any suitability analysis.
• Failed to impose procedures in a reasonable fashion.
• Charged excessive advisory fees through overvaluation of assets.
The Order states that Raymond James & Associates and Raymond James Financials Services Advisors failed to review about 7,700 accounts which displayed no trading for at least one year but which paid to Raymond James about $4.9M in fees.
C. Dabney O’Riordan, Co-Chief of the SEC Enforcement Division’s Asset Management Unit stated “Investment advisers and broker-dealers have on-going obligations to their clients and customers,”. “Raymond James’ failures cost their advisory clients and brokerage customers millions that will be repaid as part of this settlement.”
The Order charged Raymond James & Associates, Inc. and Raymond James Financial Services Advisors, Inc., with violation of Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7; and further charged Raymond James & Associates, Inc., and Raymond James Financial Services, Inc., with violating Sections 17(a)(2) and (3) of the Securities Act of 1933.
Also, Raymond James Advisors is accused of charging some clients about $51,000 in excess fees after the engaged “incorrect” UIT calculations.
Raymond James in total agreed to disgorgement of a total of $15 million, inclusive of $12 million in fees and commissions, together with a $3 million civil penalty as well as pre judgment interest.
Anthony M. Abraham, Esq., PC, has represented many investors who have claimed against Ponzi estates, bankrupt and other estates for return of assets stolen from investors through fraud. Anthony M. Abraham, Esq., PC is experienced in churning and unauthorized trading claims. If you were victimized in this Ponzi scheme and need help, please call us Toll Free at 1-877-430-4877 for a Free Consultation or email us at Anthony@Abrahamattorneys.co