Raymond James' $1.8M FINRA Fine: Late Complaint Reports and 4.7 Million Unreviewed Fund Purchases

Updated October 2026. First published September 2024. The first version described this as a case about representatives texting clients. FINRA's order is about late customer complaint reporting and unsupervised mutual fund purchases. The texting case was a separate SEC action.

On August 29, 2024, FINRA accepted a Letter of Acceptance, Waiver, and Consent from two Raymond James broker-dealers, Raymond James & Associates, Inc. (RJA) and Raymond James Financial Services, Inc. (RJFS) (AWC No. 2018059564801). Both firms are based in St. Petersburg, Florida, and both are owned by Raymond James Financial, Inc. The fines add up to $1,825,000. The firms neither admitted nor denied the findings.

Each firm was also censured. Within 180 days, a senior manager at each firm who is a registered principal had to certify in writing that the firm had fixed the complaint and direct business system issues and had a supervisory system, with written procedures, reasonably designed to comply with the complaint reporting rules.

FINRA made two separate sets of findings. One is about customer complaints that reached FINRA late or not at all. The other is about millions of mutual fund purchases that the firms' surveillance never reviewed. The case came from a FINRA exam of RJA and from FINRA's review of disclosures the firms made under Rule 4530.

If you were looking for the texting case: on August 14, 2024, the SEC announced settlements with 26 firms over recordkeeping failures involving off-channel messages, and Raymond James & Associates agreed to pay a $50 million penalty. That case came from a different regulator, and this post doesn't cover it.

Complaints That Reached FINRA Years Late

The order quotes three reporting duties for customer complaints. Rule 4530(a)(1)(B) requires a report within 30 calendar days after the firm knows or should have known that it, or one of its associated persons, is the subject of a written customer complaint alleging theft, misappropriation of funds or securities, or forgery. Rule 4530(d) requires quarterly statistical and summary data on written customer complaints, due by the 15th day of the month after the quarter ends. Article V of FINRA's By-Laws requires Form U4 and U5 amendments within 30 days of learning the facts.

Raymond James fell short on all three. From at least January 2018 until the order, the firms filed no reports under Rule 4530(a)(1)(B). Their own quarterly 4530(d) filings listed more than 20 written complaints that the firms had coded as alleging misappropriation or forgery, and none of those got a 30-day report.

From January 2018 through September 2021, the firms failed to disclose about 450 complaints on time. About 360 of them didn't appear in a 4530(d) filing until spring 2023, after FINRA told the firms about the gap. By then they were more than three years late on average, and one was eight years late. Between May 2022 and May 2023, RJFS reported at least ten complaints in its quarterly filings an average of 270 days late. On Forms U4 and U5, about 90 complaints from January 2018 through September 2021 went in an average of 175 days late, some of them nearly two years late.

The order names two causes. First, the quarterly report was built from data that staff typed into the complaint tracking system by hand: complaint date, complaint type, branch CRD number, problem code, and product code, among others. If some of those fields were left blank, the complaint dropped out of the 4530(d) report. The procedures didn't say so, and the firms didn't check that staff filled the fields in. A new system fixed this in January 2023.

Second, the handoffs were slow and nobody supervised them. Complaints often weren't researched promptly, and decisions about whether a complaint was reportable didn't reach the people who amend Forms U4 and U5. The firms also didn't supervise how fast representatives passed complaints to supervisors, or how fast supervisors passed them to the reportability team. From January 2019 to September 2021, the firms disciplined only 14 representatives for late notice.

FINRA found violations of Article V, Sections 2 and 3 of its By-Laws and of FINRA Rules 3110(a), 1122, 4530, and 2010.

4.7 Million Fund Purchases That Surveillance Didn't See

The second finding covers what the order calls direct business: mutual fund purchases that representatives placed directly with fund companies for firm customers, with the assets held away from Raymond James. From January 2012 to at least December 2017, the firms failed to reasonably supervise at least 4.7 million of them. Their automated surveillance produced exception reports for suitability review, but many transactions never got into it, and it wasn't set up to review many others.

• A data filter, in place from January 2012 to May 2016, blocked more than a million purchases made under periodic investment plans. The firms found it in May 2016 during an unrelated review and turned it off.
• Representatives had to match each direct business account to a Raymond James account by hand. If the customer had no account, the representative opened one and entered the customer's suitability information. A transaction still unmatched after 60 days (365 days from May 2016) was never reviewed, and more than a million went unreviewed this way. RJA's procedures didn't require matching from June 2013 to December 2017, and both firms' procedures said only that reviews for unmatched trades should happen "periodically." RJFS had an escalation process that included fines, and it fined only two branches while at least 700,000 purchases sat unmatched.
• Some accounts and trades fell outside the system's design. The matching tool couldn't link transactions to trusts and other accounts for non-natural persons, or to certain retirement accounts. Alerts for C shares ran only on assets held at the firms. RJFS's second surveillance system produced no exceptions for non-natural persons or periodic investment plans.

Those design gaps left out more than 530 direct C-share purchases in four accounts whose household C-share holdings topped $500,000 per fund family. They also left out about 2.7 million purchases in non-natural-person accounts and at least 947,000 periodic plan purchases for RJFS customers. About 83% of the unsupervised transactions were for less than $100.

The firms self-reported this part and reviewed the transactions they had missed. Their review and FINRA's own found about 630 potentially unsuitable purchases of A, B, and C shares, along with switches and swaps, that cost customers about $111,724 in excess sales charges and commissions. The two restitution orders add up to that amount, before interest. The suitability rule for those years was FINRA Rule 2111 (NASD Rule 2310 before July 9, 2012); since June 30, 2020, Regulation Best Interest has governed recommendations to retail customers instead. FINRA found violations of NASD Rule 3010 and FINRA Rule 3110, paragraphs (a) and (b) of each, and Rule 2010.

What to Check If Your Firm Has the Same Setup

The checks below follow the rules the order cites. They apply to any firm that files under Rule 4530 or places fund purchases away from its own custody.

Complaint Reporting

• Compare your quarterly 4530(d) data with your 4530(a)(1)(B) filings. Any complaint coded as theft, misappropriation, or forgery in the quarterly data should have its own 30-day report. Raymond James had more than 20 that didn't.
• Find out which fields your complaint system needs before a complaint lands in the quarterly file, and what happens when one is blank. Make those fields mandatory, or run an exception report on incomplete records before each filing.
• Time each handoff: when the representative got the complaint, when the supervisor got it, when someone decided whether it was reportable, and when the filing went in. Rule 4530 counts from when the firm knew or should have known, so days a complaint spends in a branch count against you. Track the average and the worst case, because FINRA did.
• Check whether late notice from representatives has consequences. The order counted how many representatives the firms disciplined for it.

Direct Business

• Reconcile counts each month: transactions received from fund companies against transactions your surveillance reviewed. A filter or a stuck queue shows up as a gap between the two.
• List the account types and transaction types your matching and exception logic can't handle. Here they were trusts and other entity accounts, certain retirement accounts, and periodic investment plans.
• Run share-class alerts, including C-share household thresholds, on direct business as well as on assets you hold.
• Put a number where your procedures say "periodically," and decide what happens to business that stays unmatched. In January 2018, Raymond James began resigning as broker of record on direct business left unmatched for 90 days.

This post is for informational purposes only and does not constitute legal advice. For guidance on specific regulatory obligations, consult your counsel or compliance advisor.