Defendant Name: Raymond James Financial Services, Inc.

Defendant Type: Subsidiary of Public Company

Document Reference: 2011-136

Document Details

Legal Case Name In the Matter of Raymond James & Associates, Inc. and Raymond James Financial Services, Inc.
Document Name SEC Charges Raymond James for Auction Rate Securities Sales Practices; Firm Agrees to Buy Back All Outstanding ARS from Eligible Customers
Document Date 29-Jun-2011
Document Format Administrative Proceeding
File Number 3-14445
Allegation Type Broker Dealer
Document Summary On June 29, 2011, the SEC announced that it instituted settled administrative proceedings against Raymond James & Associates Inc. and Raymond James Financial Services Inc. (together, "Raymond James") for making inaccurate statements when selling auction rate securities ("ARS") to customers. The SEC's administrative order finds that the firm willfully violated Section 17(a)(2) of the Securities Act of 1933. The SEC censured Raymond James, ordered it to cease and desist from future violations, and reserved the right to seek a financial penalty against the firm. Without admitting or denying the SEC's allegations, Raymond James agreed to the following: (i) offer to purchase eligible ARS from its eligible current and former customers; (ii) use its best efforts to provide liquidity solutions to customers who acted as institutional money managers who are not otherwise eligible customers; (iii) reimburse excess interest costs to eligible ARS customers who took out loans from Raymond James after February 13, 2008; (iv) compensate eligible customers who sold their ARS below par by paying the difference between par and the sale price of the ARS, plus reasonable interest; (v) at the customer's election, participate in a special arbitration process with those eligible customers who claim additional damages, and (vi) establish a toll-free telephone assistance line and a public Internet page to respond to questions concerning the terms of the settlement.

Disgorgement & Penalty Information

Resolutions
Censured

Related Documents:

33-9228 29-Jun-2011 Administrative Proceeding
Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Section 15(b) of the Securities Exchange Act of 1934 and Section 203(e) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
On June 29, 2011, the SEC instituted settled administrative and cease-and-desist proceedings against Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. According to the SEC: "Respondents offered and sold to some of their customers financial instruments known as auction rate securities ('ARS') while not accurately characterizing or while failing to adequately disclose the true nature and risks associated with these investments. ARS are bonds or preferred stock whose liquidity depends upon sufficient demand at periodic securities auctions. Although Respondents' ARS trade confirmations, sent after customers purchased ARS, disclosed the risk that these auctions could fail and that Respondents were not obliged to ensure their success, at the point-of-sale, some of Respondents' registered representatives and financial advisers improperly described ARS as safe, liquid alternatives to money market funds and other cash-like investments, without adequately disclosing the auction process or the risk of illiquidity if these auctions failed. On February 13, 2008, a significant number of ARS auctions failed, resulting in an overall market collapse that left thousands of investors, including Respondents‟ customers, holding ARS that they have not been able to liquidate."

Other Defendants in Action:

Raymond James & Associates, Inc.