The Financial Industry Regulatory Authority fined Raymond James & Associates, Inc. a total of $425,000 and ordered the brokerage and financial adviser company to pay $1.69 million to investors for charging excessive commissions.
FINRA, which is not a government entity but is funded by dues-paying members, said Thursday that Raymond James overcharged clients in about 27,000 transactions between Jan. 1 2006 and Oct. 31, 2010. The company will pay the restitution to about 15,500 customers.
St. Petersburg, Fla.-based Raymond James did not return a message seeking comment Thursday morning.
FINRA said it split the fines between two of Raymond James' divisions, with Raymond James & Associates, Inc. paying $225,000 and Raymond James Financial Services, Inc. paying $200,000 in fines.
FINRA said that the improper transactions involved cheap stocks. Raymond James used an automated commission schedule for the transactions, but its supervision of the commissions was inadequate. FINRA said the company used established inflated schedules and rates that didn't properly factor in the size and type of security being traded.
Shares of Raymond James rose 87 cents or 3.3 percent, to $27.05 in midday trading.