Raymond James Financial
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|Traded as||NYSE: RJF
S&P 500 Component
|Headquarters||St. Petersburg, Florida, United States|
|Products||Financial services, securities and insurance brokerage, investment banking, asset management, banking and cash management, trust services.|
|Revenue||6.37 billion USD (2017)|
|$636.3 million USD (2017)|
Raymond James Financial is an American diversified holding company providing financial services to individuals, corporations and municipalities through its subsidiary companies that engage primarily in investment and financial planning, in addition to investment banking and asset management.
Raymond James was founded in 1962 when St. Petersburg broker, Robert James, formed Robert A. James Investments. In 1964, the company merged with Raymond & Associates, founded by Edward Raymond in 1963, to form Raymond James & Associates. Robert James' son, Tom James, joined his father's company in 1966 and assumed leadership of the firm in 1970. The firm initially planned to go public in 1969, but market conditions delayed its plan until 1983. Tom turned over the CEO's post to Paul Reilly in 2010, and transitioned his title as Chairman of the Board to Paul Reilly in 2016. Tom still remains on the leadership team as Chairman Emeritus.
In 2012, the firm purchased the Canadian assets of Allied Irish Bank. In April 2012, Raymond James merged with Morgan Keegan & Company. The merger created one of the country's largest full-service wealth management and investment banking firms not headquartered in New York.
In January 2013, the firm reported 100 consecutive quarters of profitability.
As of October 2017, Raymond James has 7,300 financial advisors in more than 3,000 locations throughout the United States, Canada and overseas. Total client assets under management are approximately $693 billion. Raymond James corporate headquarters is located in St. Petersburg, Florida.
Raymond James has four main lines of operation: private client group, capital markets (made up of equity and fixed income capital markets as well as public finance), asset management group (made up of asset management services and Carillon tower advisers) and banking.
SEC v. Dennis Herula
In 2004, the SEC fined Raymond James $6.9 million for failure to supervise former broker Dennis Herula. Herula was accused of participating with others in a Ponzi scheme that raised about $44.5 million from investors in 1999-2000. Herula himself raised about $16.5 million of investor funds, most of which was later transferred to his wife's brokerage account at Raymond James. He was arrested in Bermuda and pleaded guilty to criminal charges of wire fraud and sentenced to 188 months in jail.
Supervision of branch managers
In 2005, the National Association of Securities Dealers fined Raymond James $2.75 million for lax supervision of producing branch managers. The investigation began with one Raymond James manager, who worked from an office in her Wisconsin home, handling approximately 700 accounts and selling mainly mutual funds and variable annuities. The Wisconsin manager was accused of selling unsuitable aggressive mutual funds and variable annuities over a four-year period.
Auction rate securities
On June 29, 2011, Raymond James announced an agreement to repurchase at par auction rate securities (ARS) sold to clients through its domestic broker/dealer subsidiaries prior to February 13, 2008. The agreement—reached with the Securities and Exchange Commission and with state securities regulators led by Florida and Texas—resolved more than three years of investigation related to activity in the ARS market. Without admitting or denying the allegations, the firm also agreed to pay a fine totaling $1.75 million to the state regulators, but was not fined by the SEC.
As a result of this agreement, a pre-tax charge of $45 million was recorded in the quarter ending June 30, 2011. This charge was a result of an estimate of the current fair value of the securities to be repurchased by the company being less than their par value. It is expected that the ultimate realized loss will be substantially less as issuers refinance or redeem these securities, interest rates rise and/or collateral values improve.
Raymond James sold $2.3 billion worth of ARS, underwrote $1.2 billion, and was the auction dealer for over $725 million. Since the $330 billion market for ARS crashed in 2008, at least 19 underwriters and broker-dealers were sued in class action suits.
In September 2011, the Financial Industry Regulatory Authority ordered Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. to pay restitution of $1.69 million to 15,500 of their clients for charging excessive commissions on more than 27,000 securities transactions. The trades were made in client accounts between 2006 and 2010.
FINRA also fined RJA $225,000 and RJFS $200,000.
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