NASD Fines Raymond James Financial Services $2.75-million
Raymond James Financial Services of St. Petersburg will pay a $2.75-million fine to the NASD for poor supervision of brokers who manage their own offices.
The company "allowed producing branch managers to supervise themselves," said James Shorris, NASD executive vice president. "This flawed supervisory system created a situation where the unsuitable sales of variable annuities and risky mutual funds to elderly and risk-averse customers went undetected."
About 1,100 Raymond James brokers who work as independent contractors were in that situation from 2000 through 2004, the NASD said. It cited the case of broker Donna Vogt, who ran an office out of her home in Cambellsport, Wisc., until Raymond James fired her in 2003 for failing to follow firm policies.
The NASD said Vogt recommended aggressive mutual funds and variable annuities to customers who were in or near retirement and Raymond James failed to detect the unsuitable investments. In addition, the NASD said Vogt sent misleading communications to some customers and no one reviewed her correspondence.
Raymond James said it has improved its supervisory procedures by investing "several million dollars" to improve technology and substantially increasing the number of workers in compliance, sales management and supervision.
The company, which did not admit or deny wrongdoing, said it has settled all client complaints relating to Vogt.
St. Petersburg Times personal finance editor Helen Huntley writes about money topics and answers questions about financial planning, investments and personal income taxes.
Thanks for making the public aware of this. Investors are urged to check out their brokers via both their state securities regulators and the NASD (via Broker Check):
http://www.nasd.com
It's gratifying to see Raymond James cooperate with the NASD and Ms. Struck's Mr. Cohen in this matter. I guess the lesson Mr. Ricciardi of the SEC taught them several years ago is fresh in their memories.
Here's a link to an article in the Milwaukee paper which provides a few more details:
http://www.jsonline.com/story/index.aspx?id=569136
Posted by: yolanda holtzee | February 22, 2007 at 06:13 AM