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FINRA Orders Raymond James to Pay $925,000 to Couple

Raymond James & Associates, Inc., and one of the brokerage’s advisers must pay $925,000 in damages to a Texas couple that purchased auction rate securities in 2008, a securities industry regulatory panel has ruled.

The Financial Industry Regulatory Authority panel awarded the damages to Rex and Sherese Glendenning, a Texas couple that originally sought $1.4 million in compensatory damages.

The Glendennings opened their account with Raymond James in January 2008, just prior to when the market for the securities collapsed. Milton recommended and invested their money in an auction rate security consisting of sewer revenue bonds, without disclosing the inherent risk that the auctions might fail, a case summary said.

The couple claimed that Milton’s actions and conduct created a false impression that there was liquidity in the auction market, leading them to believe that these securities could and would easily be sold. When the couple asked Raymond James to repurchase the securities at full value, their requests were denied, the summary said.

This is the second time in a month that a subsidiary of Raymond James Financial Inc. has been ruled against in FINRA arbitration involving auction rate securities. In July, a panel ordered Raymond James Financial Services Inc. and Raymond James & Associates to repurchase $2.5 million in auction rate securities from an investor who claimed the company failed to warn him about the risks involved.