Raymond James' Profits Take $55M Hit From Fines

Raymond James Financial said late Thursday that its latest results took a hit from legal and regulatory matters, “including an incremental $55 million provision” tied to the Securities and Exchange Commission’s industry sweep of firms’ off-channel communications, according to a statement made by CEO Paul Reilly during the firm’s earnings call with analysts.

The provision in the quarter ending Sept. 30 was a results of records not being kept for electronic communications with clients on mobile phones and messaging apps, which came to light earlier this year.

The SEC has brought charges against 40 firms and ordered more than $1.5 billion in penalties in the probe since December 2021, SEC Chariman Gary Gensler said Wednesday.

“Combined with the provision in the fiscal third quarter [ended June 30], we are confident that we are now fully reserved for this matter,” Raymond James CFO Paul Shaukry explained on the earnings call.

Overall, Raymond James reported net revenues of $3.05 billion, up 8% from a year ago. Its net income of $432 million was down 1% from last year, while its earnings of $2.02 per diluted share were up 2%.