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Business Observer Wednesday, Jun. 29, 2011 11 years ago

Raymond James settles probes

The firm will buy back $300 million in securities, and pay a $1.75 million fine.

ST. PETERSBURG — Raymond James Financial Inc. (symbol: RJF) agreed to buy back $300 million in auction-rate securities, as well as pay a fine of $1.75 million, to settle federal and state probes accusing the firm of misleading clients.

Regulators claimed that Raymond James falsely led its customers to believe that the auction-rate debt it is now being forced to buy back was as safe as money market funds or cash equivalents. By agreeing to settle, Raymond James does not admit to any wrongdoing.

In a prepared statement, Raymond James CEO Paul Reilly says, “I am pleased we are able to resolve this issue and provide liquidity to clients who continue to hold ARS in their portfolios.” The company will record a $50 million pretax charge in the quarter that ends June 30 as a result of the settlement, the statement says.

Raymond James Financial generated $3 billion in revenues in its 2010 fiscal year, ended Sept. 30. Its stock price went up 3% on Wednesday, to $32.15 a share.

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