Raymond James to Pay Nearly $2M for Failure to Report Complaints, Mutual Fund Transactions

What You Need to Know

Raymond James failed to reasonably supervise the timely reporting of customer complaints, FINRA finds.
RJFS also failed to reasonably supervise at least 4.7 million mutual fund purchases.
Raymond James also failied to configure the firms’ automated surveillance systems to review certain types of direct business transactions.

The Financial Industry Regulatory Authority has ordered Raymond James & Associates and Raymond James Financial Services to pay nearly $2 million for failing to report customer complaints as well as failures to supervise mutual fund purchases made by Raymond James reps.

According to FINRA’s order, since at least January 2018, RJA and RJFS have “failed to reasonably supervise the firms’ reporting, and timely reporting, of customer complaints via FINRA Rule 4530 filings and amendments to registered representatives’ Forms U4 and U5,” the order states.

Further, the firms “have not taken reasonable steps to ensure that firm personnel manually enter into the firms’ electronic system certain data required to make quarterly FINRA Rule 4530 filings. The firms also have not established reasonable controls to ensure that associated persons timely notify appropriate firm personnel of customer complaints.”

From January 2012 to at least December 2017, RJA and RJFS also failed to reasonably supervise at least 4.7 million mutual fund purchases “that the firms’ representatives made directly with mutual fund companies on behalf of firm customers (direct business transactions). The firms failed to ingest many transactions into their automated surveillance systems, and had not configured their systems to review many other transactions.”

Since at least January 2018, Raymond James “has failed to report any written customer complaints pursuant to FINRA Rule 4530(a)(1)(B), even though the firms have received numerous complaints alleging forgery, theft, or misappropriation of funds or securities,” FINRA said.

“And while RJA and RJFS have made FINRA Rule 4530(d) filings disclosing over 20 written customer complaints that the firms themselves categorized as alleging misappropriation or forgery, the firms have failed to report any of those complaints” as required, according to FINRA’s order.