In Arkansas alone, there were over 3,544 transactions with mark-ups of more than 5 percent, totaling $113,413.87. Affected Arkansas customers will receive restitution of the excessive commissions plus interest. Raymond James will pay a $75,000 fine to the ASD. Raymond James must also certify in writing that it has changed its policies and enhanced its procedures to ensure that all commissions are fair and reasonable.
The multi-state investigation was led by state securities regulators in Alabama, California, Illinois, Massachusetts, Montana, and Washington and found that Raymond James charged unreasonable commissions on over 270,000 equity transactions and trades nationwide over the past five years. Raymond James took a commission on these transactions of more than 5 percent of the principal value, with commissions in some cases exceeding 90 percent of the principal value of the customer's transaction. This practice resulted in overcharging its customers by $8.25 million.
“Regardless of how large or small an investor’s transactions may be, brokerage firms making these transactions on behalf of investors have a duty to follow the law,” ASD Commissioner Susannah T. Marshall said. “The ASD is committed to ensuring that Arkansas investors are treated fairly and are protected by our state’s securities laws.”
Raymond James neither admitted nor denied the findings and fully cooperated with the multi-state investigation.
About Arkansas Securities Department
The Arkansas Securities Department is charged with implementing and overseeing the Arkansas Securities Act, Arkansas Fair Mortgage Lending Act, the Arkansas Money Services Act, Arkansas Savings and Loan Act, and the Arkansas Credit Union Act, the Department regulates the sale of securities, securities brokerage firms and their agents, state-registered investment advisers and their representatives, mortgage loan companies and their loan officers, money services companies, as well as state-chartered credit unions and savings & loans. Our activities include registration, compliance, investigation of customer complaints, and consumer education.