Raymond James
Encyclopedia
Raymond James Financial is a diversified financial services holding company whose subsidiaries engage primarily in investment and financial planning, in addition to investment banking
and asset management. Raymond James Financial has three wholly owned broker-dealers, [Raymond James & Associates (RJ&A), Raymond James Financial Services (RJFS), and Raymond James Limited (RJL)] and Raymond James Investment Services Limited (RJIS), a majority-owned independent contractor subsidiary in the United Kingdom.
As of September 30, 2011, Raymond James has approximately 5,400 financial advisors and approximately 2 million accounts in 2,400 locations throughout the United States, Canada, Europe and Latin America. Total client assets are approximately $256 billion, of which approximately $32 billion are managed by the firm’s asset management subsidiaries. Raymond James corporate headquarters is located in St. Petersburg, Florida
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The Private Client Group is Raymond James’ retail segment, which consists of 5,400 financial advisors, affiliated as traditional employees, independent contractors, independent registered investment advisors, or employees in local banks or credit unions. These financial advisors provide securities transaction, investment advisory and financial planning services to individual investors through their affiliates.
Capital Markets
The Capital Markets group is Raymond James’ institutional segment. Equity Capital Markets includes Investment Banking, Equity Research, and Equity Sales and Trading. Fixed Income includes Municipal and Taxable Fixed Income, Public Finance, and Fixed Income Research. In addition, Raymond James Tax Credit Funds syndicates investments in low-income housing.
Asset Management Group
The Asset Management Group includes Asset Management Services which provides fee-based individual portfolio management for Raymond James clients. Subsidiary firm Eagle Asset Management provides institutional and individual investors with Raymond James and other broker/dealer platforms with separately managed account options and mutual fund products. Also included in this segment is Raymond James Trust N.A.
Raymond James Bank
Raymond James Bank is a federally chartered savings bank that provides residential, consumer and commercial loans, as well as FDIC-insured deposit accounts. The bank also purchases residential whole loans and is an active participant in corporate loan syndications.
Other
The firm also includes proprietary capital operations, as well as international joint-venture operations in emerging markets, stock loan/borrow, and miscellaneous other corporate activities and overhead.
In 2004, the SEC fined Raymond James $6.9 million for failure to supervise former broker Dennis Herula. Herula was accused of participating with others in a ponzi scheme
that raised about $44.5 million from investors in 1999-2000. Herula himself raised about $16.5 million of investor funds, most of which was later transferred to his wife's brokerage account at Raymond James. He was arrested in Bermuda and pleaded guilty to criminal charges of wire fraud and sentenced to 188 months in jail.
Supervision of Branch Managers
In 2005, the NASD fined Raymond James $2.75 million for lax supervision of producing branch managers. The investigation began with one Raymond James manager, who worked from an office in her Wisconsin home, handling approximently 700 accounts and selling mainly mutual funds and variable annuities. The Wisconsin manager was accused of selling unsuitable aggressive mutual funds and variable annuities over a four-year period.
Auction Rate Securities (ARS)
On June 29, 2011, Raymond James announced an agreement to repurchase at par auction rate securities (ARS) sold to clients through its domestic broker/dealer subsidiaries prior to February 13, 2008. The agreement – reached with the Securities and Exchange Commission and with state securities regulators led by Florida and Texas – resolved over three years of investigation related to activity in the ARS market. Without admitting or denying the allegations, the firm also agreed to pay a fine totaling $1.75 million to the state regulators, but was not fined by the SEC.
As a result of this agreement, a pretax charge of $45 million was recorded in the quarter ending June 30, 2011. This charge was primarily a result of an estimate of the current fair value of the securities to be repurchased by Raymond James being less than their par value. It is expected that the ultimate realized loss will be substantially less as issuers refinance or redeem these securities, interest rates rise and/or collateral values improve.
Raymond James sold $2.3 billion of ARS, underwrote $1.2 billion, and was the auction dealer for over $725 million. Since the $330 billion market for ARS crashed in 2008, at least 19 underwriters and broker-dealers were sued in class-action, or group, suits.
Excessive Commissions
In September 2011, FINRA ordered Raymond James & Associates, Inc. (RJA) and Raymond James Financial Services, Inc. (RJFS) to pay restitution of $1.69 million to 15,500 clients for charging excessive commissions on more than 27,000 securities transactions. The trades were made in client accounts between 2006 and 2010. FINRA also fined RJA $225,000 and RJFS $200,000.
Raymond James first purchased the naming rights to Raymond James Stadium in 1998; in 2006, the firm extended the contract until 2015. The stadium, located in Tampa, FL, is home to the NFL’s Tampa Bay Buccaneers and the University of South Florida Bulls. Raymond James Stadium also hosts the New Year’s Day Outback Bowl, as well as concerts and special events. It was also the host of Super Bowl XXXV on January 28, 2001 and Super Bowl XLIII on February 1, 2009.
The collection began in the 1950s and initially featured mostly American artists. In the mid 1980s, while on trips to Colorado and New Mexico, James began collecting the Western and Southwestern art that currently makes up more than 50 percent of the collection. The collection also includes pieces by Alexander Calder, Salvador Dalí, Roy Lichtenstein, Joan Miró, Robert Rauschenberg, James Rosenquist and Andy Warhol.
Tom James has been president of the Dali Museum Board of Trustees since 1994, and Raymond James has been the title sponsor of the Raymond James Gasparilla Festival of the Arts in Tampa, for the past 11 years. The company has also supported other arts organizations and festivals around the Tampa Bay area, and was recognized in October 2008 with a Business in the Arts Award from the Tampa Bay Business Committee for the Arts.
Kicking for Kids at Raymond James Stadium
In cooperation with the Tampa Bay Buccaneers, the firm donates $1,000 to designated children’s hospitals for every field goal made by the team during the regular season. Since the program started, Raymond James has contributed more than $204,000. The event benefits All Children’s Hospital in St. Petersburg, FL, St. Joseph’s Children’s Hospital in Tampa, FL, and Arnold Palmer Hospital for Children in Orlando, FL.
Sack Hunger at Raymond James Stadium
On game-days, food and donations are raised for local food banks around the Tampa Bay area. Since 2000, more than 118 tons of non-perishable food items and funding for approximately 227,430 meals have been collected.
United Way
In the 2010-2011 United Way campaign, a total gift of $2,823,002.07 was raised through matching qualified donations. The firm has been awarded the “Million Dollar Workplace Campaign” by the United Way of Tampa for the past six years.
Gasparilla Festival of the Arts
In addition to providing financial support, Raymond James coordinates 300+ volunteer workers during the festival. The firm also offers professional guidance on marketing and event planning for the event.
Habitat for Humanity
Over the past 10 years, Raymond James has contributed more than $261,981 to Habitat for Humanity projects, most of which are concentrated in Tampa Bay and Pinellas County. The firm’s associates have also participated in building these homes.
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...
and asset management. Raymond James Financial has three wholly owned broker-dealers, [Raymond James & Associates (RJ&A), Raymond James Financial Services (RJFS), and Raymond James Limited (RJL)] and Raymond James Investment Services Limited (RJIS), a majority-owned independent contractor subsidiary in the United Kingdom.
As of September 30, 2011, Raymond James has approximately 5,400 financial advisors and approximately 2 million accounts in 2,400 locations throughout the United States, Canada, Europe and Latin America. Total client assets are approximately $256 billion, of which approximately $32 billion are managed by the firm’s asset management subsidiaries. Raymond James corporate headquarters is located in St. Petersburg, Florida
St. Petersburg, Florida
St. Petersburg is a city in Pinellas County, Florida, United States. It is known as a vacation destination for both American and foreign tourists. As of 2008, the population estimate by the U.S. Census Bureau is 245,314, making St...
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Raymond James Businesses
Private Client GroupThe Private Client Group is Raymond James’ retail segment, which consists of 5,400 financial advisors, affiliated as traditional employees, independent contractors, independent registered investment advisors, or employees in local banks or credit unions. These financial advisors provide securities transaction, investment advisory and financial planning services to individual investors through their affiliates.
Capital Markets
The Capital Markets group is Raymond James’ institutional segment. Equity Capital Markets includes Investment Banking, Equity Research, and Equity Sales and Trading. Fixed Income includes Municipal and Taxable Fixed Income, Public Finance, and Fixed Income Research. In addition, Raymond James Tax Credit Funds syndicates investments in low-income housing.
Asset Management Group
The Asset Management Group includes Asset Management Services which provides fee-based individual portfolio management for Raymond James clients. Subsidiary firm Eagle Asset Management provides institutional and individual investors with Raymond James and other broker/dealer platforms with separately managed account options and mutual fund products. Also included in this segment is Raymond James Trust N.A.
Raymond James Bank
Raymond James Bank is a federally chartered savings bank that provides residential, consumer and commercial loans, as well as FDIC-insured deposit accounts. The bank also purchases residential whole loans and is an active participant in corporate loan syndications.
Other
The firm also includes proprietary capital operations, as well as international joint-venture operations in emerging markets, stock loan/borrow, and miscellaneous other corporate activities and overhead.
Controversies
SEC v. Dennis HerulaIn 2004, the SEC fined Raymond James $6.9 million for failure to supervise former broker Dennis Herula. Herula was accused of participating with others in a ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
that raised about $44.5 million from investors in 1999-2000. Herula himself raised about $16.5 million of investor funds, most of which was later transferred to his wife's brokerage account at Raymond James. He was arrested in Bermuda and pleaded guilty to criminal charges of wire fraud and sentenced to 188 months in jail.
Supervision of Branch Managers
In 2005, the NASD fined Raymond James $2.75 million for lax supervision of producing branch managers. The investigation began with one Raymond James manager, who worked from an office in her Wisconsin home, handling approximently 700 accounts and selling mainly mutual funds and variable annuities. The Wisconsin manager was accused of selling unsuitable aggressive mutual funds and variable annuities over a four-year period.
Auction Rate Securities (ARS)
On June 29, 2011, Raymond James announced an agreement to repurchase at par auction rate securities (ARS) sold to clients through its domestic broker/dealer subsidiaries prior to February 13, 2008. The agreement – reached with the Securities and Exchange Commission and with state securities regulators led by Florida and Texas – resolved over three years of investigation related to activity in the ARS market. Without admitting or denying the allegations, the firm also agreed to pay a fine totaling $1.75 million to the state regulators, but was not fined by the SEC.
As a result of this agreement, a pretax charge of $45 million was recorded in the quarter ending June 30, 2011. This charge was primarily a result of an estimate of the current fair value of the securities to be repurchased by Raymond James being less than their par value. It is expected that the ultimate realized loss will be substantially less as issuers refinance or redeem these securities, interest rates rise and/or collateral values improve.
Raymond James sold $2.3 billion of ARS, underwrote $1.2 billion, and was the auction dealer for over $725 million. Since the $330 billion market for ARS crashed in 2008, at least 19 underwriters and broker-dealers were sued in class-action, or group, suits.
Excessive Commissions
In September 2011, FINRA ordered Raymond James & Associates, Inc. (RJA) and Raymond James Financial Services, Inc. (RJFS) to pay restitution of $1.69 million to 15,500 clients for charging excessive commissions on more than 27,000 securities transactions. The trades were made in client accounts between 2006 and 2010. FINRA also fined RJA $225,000 and RJFS $200,000.
Marketing and Advertising
Raymond James StadiumRaymond James first purchased the naming rights to Raymond James Stadium in 1998; in 2006, the firm extended the contract until 2015. The stadium, located in Tampa, FL, is home to the NFL’s Tampa Bay Buccaneers and the University of South Florida Bulls. Raymond James Stadium also hosts the New Year’s Day Outback Bowl, as well as concerts and special events. It was also the host of Super Bowl XXXV on January 28, 2001 and Super Bowl XLIII on February 1, 2009.
The Arts
The Tom and Mary James-Raymond James Financial Art Collection, located at the corporate headquarters in St. Petersburg, Florida, consists of more than 1,800 works of art, and includes paintings, sculptures, graphics, drawings, mixed media and prints. Ninety-five percent of the collection is owned by Tom and Mary James. It is also one of Florida's largest private art collections.The collection began in the 1950s and initially featured mostly American artists. In the mid 1980s, while on trips to Colorado and New Mexico, James began collecting the Western and Southwestern art that currently makes up more than 50 percent of the collection. The collection also includes pieces by Alexander Calder, Salvador Dalí, Roy Lichtenstein, Joan Miró, Robert Rauschenberg, James Rosenquist and Andy Warhol.
Tom James has been president of the Dali Museum Board of Trustees since 1994, and Raymond James has been the title sponsor of the Raymond James Gasparilla Festival of the Arts in Tampa, for the past 11 years. The company has also supported other arts organizations and festivals around the Tampa Bay area, and was recognized in October 2008 with a Business in the Arts Award from the Tampa Bay Business Committee for the Arts.
Community Involvement
Raymond James contributes financial and volunteer support to benefit non-profit organizations in the Tampa Bay area and nationally. Examples include:Kicking for Kids at Raymond James Stadium
Raymond James Stadium
Raymond James Stadium, also known as the "Ray Jay", is a multi-purpose football stadium located in Tampa, Florida. It is home to the NFL's Tampa Bay Buccaneers as well as the NCAA's South Florida Bulls football team. The stadium seats 65,857 , and it is expandable to 75,000 for special events...
In cooperation with the Tampa Bay Buccaneers, the firm donates $1,000 to designated children’s hospitals for every field goal made by the team during the regular season. Since the program started, Raymond James has contributed more than $204,000. The event benefits All Children’s Hospital in St. Petersburg, FL, St. Joseph’s Children’s Hospital in Tampa, FL, and Arnold Palmer Hospital for Children in Orlando, FL.
Sack Hunger at Raymond James Stadium
Raymond James Stadium
Raymond James Stadium, also known as the "Ray Jay", is a multi-purpose football stadium located in Tampa, Florida. It is home to the NFL's Tampa Bay Buccaneers as well as the NCAA's South Florida Bulls football team. The stadium seats 65,857 , and it is expandable to 75,000 for special events...
On game-days, food and donations are raised for local food banks around the Tampa Bay area. Since 2000, more than 118 tons of non-perishable food items and funding for approximately 227,430 meals have been collected.
United Way
In the 2010-2011 United Way campaign, a total gift of $2,823,002.07 was raised through matching qualified donations. The firm has been awarded the “Million Dollar Workplace Campaign” by the United Way of Tampa for the past six years.
Gasparilla Festival of the Arts
In addition to providing financial support, Raymond James coordinates 300+ volunteer workers during the festival. The firm also offers professional guidance on marketing and event planning for the event.
Habitat for Humanity
Over the past 10 years, Raymond James has contributed more than $261,981 to Habitat for Humanity projects, most of which are concentrated in Tampa Bay and Pinellas County. The firm’s associates have also participated in building these homes.