NJ Payments Part of a $12.45 Million Settlement Resolving Multi-State Securities Investigation

Consent Order

TRENTON — The Office of the Attorney General and the Division of Consumer Affairs today announced that the Bureau of Securities has joined a multi-state settlement with two Florida- based broker-dealers that have agreed to pay at least $8.25 million in refunds to investors who were charged unreasonable commission fees on small-dollar transactions. In New Jersey, investors affected by the overcharges will receive more than $240,000 from the settlement.

The settlement with Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. (collectively Raymond James) resolves an investigation led by state securities regulators in Alabama, California, Illinois, Massachusetts, Montana, and Washington that found Raymond James charged unreasonable commissions on more than 270,000 equity transactions and trades nationwide over the past five years. The investigation found that Raymond James took commissions exceeding 5% of the principal value of the transaction, with commissions in some cases exceeding 90% of the principal value of the transaction.

Based on the investigative findings, the states concluded that Raymond James failed to have sufficient policies and procedures in place to ensure that its investors were being charged reasonable commissions and fees.

Under the terms of the settlement, affected investors in states participating in the settlement will receive restitution in the amount they were overcharged, plus interest. Additionally, under the settlement, Raymond James will pay $4.2 million in penalties and costs to the states and certify in writing that it has changed its policies and enhanced its procedures to ensure that all commissions are fair and reasonable.

“This settlement is the latest example of how states are working together to ensure that brokerage firms are operating in compliance with the laws and regulations that protect investors from unfair practices,” said Executive Assistant Attorney General Shirley Emehelu. “We will continue to work cooperatively with states across the nation to hold violators accountable.”

According to an Administrative Consent Order executed by the Bureau today, in New Jersey, Raymond James charged unreasonable commissions on 6,989 transactions.

The Order, which requires Raymond James to provide restitution plus interest to New Jersey customers in an amount of $241,815, also censures the firms and orders them to permanently cease and desist from the violative conduct described in the Order.

“Enforcement actions by the Bureau of Securities are a critical component of the Division’s efforts to protect consumers,” said Cari Fais, Acting Director of the Division of Consumer Affairs. “Firms that fail to follow our investor protection laws will face significant consequences.”

“This settlement is an important reminder that firms must have policies and procedures in place to ensure customers are being charged reasonable commissions and fees,” said Acting Bureau Chief Amy Kopleton. “Raymond James’ failure to have those guardrails in place cost New Jersey customers more than $200,000 that will be repaid as part of this settlement.”

New Jersey residents entitled to restitution have been notified by mail and the restitution process is ongoing.

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The Bureau is charged with protecting investors from investment fraud and regulating the securities industry in New Jersey. It is critical that investors “Check Before You Invest.” Investors can obtain information, including the registration status and disciplinary history, of any financial professional doing business to or from New Jersey, by contacting the Bureau toll-free within New Jersey at 1-866-I-Invest (1-866-446-8378) or from outside New Jersey at (973) 504-3600, or by visiting the Bureau’s website at www.NJSecurities.gov. Investors can also contact the Bureau for assistance, or to raise issues or complaints about New Jersey-based financial professionals or investments.

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