Raymond James Agrees to Return $4.4 Million in Mutual Fund Overcharges

Raymond James Agrees to Return $4.4 Million in Mutual Fund Overcharges

Raymond James Agrees to Return $4.4 Million in Mutual Fund Overcharges 150 150 Robert Rex, Esq.

July 6, 2015

Raymond James & Associates  entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that from July 2009 through December 2014, Raymond James disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares without a front-end sales charge but were instead sold Class A shares with a front end sales charge or Class B or C shares with back end sales charges and higher on going fees.

Class A shares typically are subject to a front-end sales charge when originally purchased, and have annual fund expenses, including ongoing distribution and service fees that are typically 0.25percent. The majority of the front-end charge is paid to the selling broker-dealer as a concession.  Investors purchase Class A shares at the applicable Net Asset Value (“NAV”), plus the initial sales charge. Most funds, however, offer certain investors a waiver ofthe initial sales charge associated with Class A shares under certain circumstances.

Class B and C shares typically do not carry a front-end sales charge but have significantly higher fees (typically 1.00 percent) and may be subject to a contingent deferred sales charge .

Some mutual funds offer Class R shares for purchase by retirement plans. Class R shares typically are sold without a front-end sales charge. However,ClassR shares typically have higher fees than Class A shares.

After performing a review in June 2014, Raymond James self reported to FINRA that in over 59,000 transactions, involving over 4,200 accounts, customers were overcharged over $4.1 million. Raymond James agreed to pay restitution of over $4.4 million to the affected customers.

AWC NO. 2015044309001

Raymond James, a subsidiary of Raymond James Financial, is headquartered in St. Petersburg, Florida and has over 3,200 financial advisors nationwide.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

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