Raymond James Financial, Inc.
NASD Fines Raymond James Over Wrap Accounts
The NASD censured and fined Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. $750,000 for fee-based (or “wrap”) account violations and ordered $138,000 in restitution. The NASD found that Raymond James did not have a supervisory system to monitor their fee-based accounts. Many clients were “buy and hold” customers who would have been better off in commission-based accounts and never even entered a trade during the period investigated, yet they paid $138,000 in fees. Raymond James terminated its fee-based brokerage business rather than retain an independent consultant and establish adequate training and supervision of fee-based accounts as required by the NASD’s order.
NASD Fines Raymond James for Lax Supervision
The NASD fined Raymond James Financial Services, Inc. $2.75 million for failing to adequately supervise more than 1,000 “producing” branch managers nationwide. The NASD’s investigation revealed that Raymond James allowed producing branch managers to supervise themselves. This flawed supervisory system created a situation where unsuitable securities transactions to elderly and risk-averse customers went undetected. The NASD determined that this, and Raymond James’ compliance through electronic transaction surveillance with only three “sales managers” over the more than 1,000 “branch” managers was insufficient.