FINRA fines Raymond James & Associates for 1.85 million inaccurate trade confirmations
Raymond James & Associates, Inc has agreed to pay a a fine of $300,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From January 2014 to January 2021, when the firm acted in more than one capacity in executing orders, the firm did not provide each specific capacity in which the firm acted on the customer confirmations. Instead, Raymond James disclosed that it acted in a “mixed capacity (i.e., agent, agency cross, principal and/or riskless principal)” and that the “breakdown of execution capacity is available upon request.”
Raymond James’s system prevented the firm from populating the specific capacities in which the firm acted if the firm acted in more than one capacity on a transaction. This issue affected approximately 750,000 confirmations.
Further, from at least July 2017 to September 2022, due to a programming error, the firm sent customers trade confirmations that incorrectly disclosed transactions as average price executions when the firm filled the order in a single execution. A review of two of the firm’s six order management systems, from October 2019 to December 2019, revealed that the firm incorrectly identified single executions as average price executions on approximately 1,050,000 confirmations issued to customers.
In addition, from December 2018 through June 2020, Raymond James failed to disclose or inaccurately disclosed that it was a market maker on approximately 52,350 confirmations sent to customers. This issue stemmed from a programming error that impacted the input that identified the accurate market maker status on trade confirmations.
Therefore, Respondent violated Exchange Act Rule 10b-10, Exchange Act Section 17(a), Exchange Act Rule 17a-3, and FINRA Rules 2232, 4511, and 2010.
On top of the fine, the respondent consents to the imposition of a censure.