.png)
.png)
Raymond James & Associates (RJA) and its subsidiary have agreed to pay over $1.9 million to settle allegations from the Financial Industry Regulatory Authority (FINRA) that the firm did not have an effective system for handling customer complaints and failed to reasonably supervise millions of direct mutual fund transactions.
According to a disciplinary action announced by FINRA on Thursday, RJA will pay a $525,000 fine and more than $26,000 in restitution to 19 customers. Its subsidiary, Raymond James Financial Services (RJFS), will pay a $1.3 million fine and over $85,500 in restitution to 40 customers.
The disciplinary action stems from multiple supervisory failures. Since January 2018, RJA allegedly failed to properly supervise the reporting of complaints and ensure that personnel manually entered information into its electronic system, which is necessary for quarterly filings with FINRA. The firm also lacked reasonable controls to notify the appropriate personnel of customer complaints, FINRA stated.
Additionally, between January 2012 and December 2017, RJA allegedly failed to supervise 4.7 million direct mutual fund purchases made on behalf of customers. Many of these transactions were not added to the firm’s automated surveillance system, and the system was not configured to review the transactions effectively, according to FINRA.
During its examination, FINRA discovered certain misconduct but acknowledged that other issues, including the firm’s failure to reasonably supervise direct mutual fund transactions, were self-disclosed by RJA.
As part of the settlement, RJA and RJFS are required to certify in writing to FINRA within six months that they have remediated their customer complaint system and implemented an adequate supervisory system. RJA reviewed its transaction history with FINRA and concluded that customers were allegedly charged more than $111,000 in excess sales and commissions.
RJA and RJFS were not immediately available for comment.
By fLEXI tEAM
Comments