Raymond James Financial Inc
The St. Petersburg, Florida-based company overcharged customers by $1.69 million on more than 27,000 transactions between 2006 and October 2010, based on automated commission schedules, the Financial Industry Regulatory Authority said. The firm did not factor in security type and transaction size when determining the fairness of commission charges.
Most of the trades in question involved low-priced stocks.
Broker dealers must ensure their automated systems set commission charges that are fair to investors, Brad Bennett, FINRA's enforcement chief, said in a statement. Raymond James failed to adequately monitor its supervisory systems.
Raymond James, which markets itself as a more client-friendly alternative to Wall Street's big brokerages, agreed to return $1.69 million of charges to affected investors and an additional $425,000 in fines to resolve FINRA's claims. Raymond James neither admitted or denied wrongdoing.
A Raymond James spokesman said the firm revised its automated commission schedule on July 1 this year after being notified by FINRA. Raymond James also played down the excessive commissions, saying the impact over five years averaged $110 per account.
The affected trades represent less than 0.1 percent of the total equity trades executed by Raymond James during the period reviewed by FINRA, spokesman Steve Hollister said.
FINRA said the company's two broker dealer units, Raymond James & Associates and Raymond James Financial Services, must also calculate and repay any additional overcharges dating after November 1 last year.
Overcharging for trades has led to several FINRA actions in recent year. SunTrust Investment Services, a unit of SunTrust Banks Inc
In 2009, FINRA fined NEXT Financial Group $1 million for supervisory failures that led to account churning and excessive commissions.
(Reporting by Joseph A. Giannone, editing by Matthew Lewis)