Raymond James :: Stock Broker Fraud Blog

The Financial Industry Regulatory Authority says that RBC Capital Markets Corp., Raymond James & Associates, Inc., and an RBCCMC head trader have settled charges over alleged broker misconduct connected to stock loan improprieties. RJF is to pay a $1 million fine, while RBC Capital Markets will pay $400,000.

Meantime, RBCCMC Stock Loan Department head trader Benedict Patrick Tommasino has agreed to a $30,000 fine, a 20-month suspension from working for a securities firm, and another two-month suspension from acting in a principal role.

According to FINRA, RJF allegedly executed payments that were improper and unjustified to finder firms even though the companies didn’t provide services to locate the securities and they weren’t involved in the stock loan transactions for which they were receiving payments. For example, in March and 2004, Raymond James paid two finder firms for 11 transactions even though they didn’t perform a service. A Raymond James loan trader’s son was employed at one of the finder firms.

FINRA is also accusing the two broker-dealers of allegedly letting Dennis Palmeri, Sr. perform stock loan functions. Only registered individuals are allowed to perform this role.

Palmeri is a non-registered person that had been barred from the securities industry. He was previously convicted of federal securities law violations in 1994. Following his conviction, the SEC barred him from working for an investment advisor, a broker dealer, or an investment company. While Palmeri can act as a non-registered finder, he cannot perform roles requiring that the individual be registered.

Susan Merrill, the FINRA enforcement chief, says the two firms exposed the market to an individual that was non-registered, unqualified, unsupervised, and was not allowed to work in the securities industry. FINRA also claims that the two broker-dealers failed to reasonably supervise their Stock Loan Departments. By agreeing to settle, Tommasino and the two broker-dealers are not denying or admitting misconduct.

Related Web Resources:
FINRA Fines Raymond James, RBC Capital Markets Corporation, Stock Loan Trader for Improper Stock Loan Practices, FINRA, June 17, 2009

FINRA fines Raymond James, RBC Capital Markets, Forbes, June 17, 2009

Continue reading "Raymond James and RBC Capital Markets Fined $1.4 Million in Total Over Improper Stock Lending Activities" »

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Posted In: Bond Dealers , Broker Fraud , FINRA , Financial Advisers , Financial Firms , RBC Capital Markets Corp. , Raymond James

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NASD says that it is fining Raymond James Financial Services $2.75 million for not adequately supervising more than 1,000 producing sales managers across the U.S between 2002 to 2004. NASD also permanently barred one of RJFS’s branch managers, Donna Vogt, for making unsuitable recommendations to retirement age and elderly customers regarding variable annuity purchases and mutual funds. Some of these transactions were deemed unsuitable because of their over-concentration in aggressive growth funds. She is also accused of making misleading statements when corresponding with customers, treating them as if they belonged to the same group regardless of financial status, age, objectives, and investment experience.

NASD says the St. Petersburg firm neglected to notice sales practice abuses because of its deficient supervisory system. Producing branch managers had to be their own supervisors—opening and approving new accounts, approving their own sales transactions, and checking their correspondence. Because of this, RJFS’s system for supervision was not in compliance with securities regulations and rules.

NASD also claims that RJFS does not have a proper system set up to properly oversee variable annuity sales. Only three exception reports have been used to screen variable annuity purchases, and transactions were not screened for suitability based on yearly income, net worth of the customer, concentration of variable annuity holdings as part of net worth, or investment experience. As a result, unsuitable recommendations by Vogt went unnoticed.

NASD says the firm did not review annuity sub-account transaction recommendations by its branch managers because there was no system in place. Certain records and books, as well as a system for recording these transactions, were not maintained either, and NASD says that there were deficiencies in the firm’s branch audit program.

Although RJFS and Vogt have consented to NASD’s findings, they have not denied or admitted the charges.

If you are investor and you want to get more information regarding any NASD-registered brokerage or brokerage firm, you can use the NASD’s BrokerChecker, free of charge.

Reporting your investment loss to the NASD won’t necessarily help you recoup your investment. Shepherd Smith and Edwards, however, can help you. Our attorneys have helped thousands of Americans recover their investment losses in the securities industry, with our clients collectively recouping millions of dollars because of our legal assistance in mediation, litigation, negotiations, and arbitration. Contact Shepherd Smith and Edwards today, and your initial consultation is free.

NASD Fines Raymond James Financial Services, Inc. $2.75 Million for Lax Supervision of Producing Branch Managers, NASD, February 21, 2007

Raymond James Fined in Lack of Oversight, New York Times, February 22, 2007

Related Web Resources:

Raymond James Financial

NASD

NASD BrokerChecker

Posted by Shepherd Smith Edwards & Kantas | Permalink | Email This Post

Posted In: NASD Enforcement , Raymond James

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Stock Broker Fraud Blog

Published by Houston Securities Fraud Lawyers Shepherd Smith Edwards & Kantas

Raymond James and RBC Capital Markets Fined $1.4 Million in Total Over Improper Stock Lending Activities

Raymond James Financial Services Is Fined $2.75 million By NASD

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