New Jersey Investors to Receive $240,000 in Refunds from Broker-Dealers After Multi-State Investigation

Settlement of $12.45 Million Ensures Fair Practices in Brokerage Commissions, NJ Beneficiaries to Receive Over $240K

In a significant move for investor protection, the New Jersey Office of the Attorney General and the Division of Consumer Affairs have announced their participation in a multi-state settlement involving two Florida-based broker-dealers, Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. The settlement, a result of a multi-state investigation, mandates at least $8.25 million in refunds to investors overcharged with unreasonable commission fees on small-dollar transactions.

The joint investigation, spearheaded by state securities regulators from Alabama, California, Illinois, Massachusetts, Montana, and Washington, revealed that Raymond James had imposed exorbitant commissions on over 270,000 equity transactions nationwide in the past five years. These commissions, often exceeding 5% of the principal transaction value, in some instances soared to more than 90%.

The states concluded that Raymond James lacked adequate policies to guarantee reasonable commission charges. The settlement obliges Raymond James to refund the overcharged amounts with interest to affected investors in the participating states. Additionally, Raymond James is to pay $4.2 million in penalties and affirm in writing their revised policies for fair and reasonable commissions.

New Jersey's portion of the settlement exceeds $240,000, compensating for the unreasonable commissions charged on 6,989 transactions within the state. An Administrative Consent Order executed by the Bureau today censures the firms and demands a permanent halt to such violative practices.

Executive Assistant Attorney General Shirley Emehelu highlighted this settlement as a testament to states' collaborative efforts in upholding investor protection laws. Acting Director of the Division of Consumer Affairs, Cari Fais, and Acting Bureau Chief Amy Kopleton emphasized the critical role of enforcement actions in safeguarding consumer interests and ensuring compliance with investment laws.

Affected New Jersey residents have been notified of their entitlement to restitution through mail, and the process of restitution is currently underway. This settlement marks a crucial step in enforcing fair brokerage practices and protecting investor rights in New Jersey and across participating states.