Raymond James Hit Again for Regulatory Infraction: Newest Fine is $5.95 Million

Raymond James is in trouble again. The brokerage firm agreed to pay almost $6 million related to charges connected to Jay Peak, a ski resort in northern Vermont. Regulators are saying that the ski resort violated state laws, and that two businessmen misused $200 of $350 million of investor funds. Owner Ariel Quiros and CEO William Stenger, are accused of taking advantage of immigrants seeking permanent residency in the country through a U.S. Citizenship and Immigration Service program for investors. They were investing in Limited Liability Partnerships, and were told that their investments would be used with Jay Peak. Instead, Quiros and Stenger used $200 million of that money in other ways that were not permitted. Raymond James Financial and Raymond James & Associates were charged with allegedly enabling the scheme through lax supervision.

Vermont’s Department of Financial Regulation accused Raymond James of supervisory failures related to the investments. Raymond James also failed to obtain adequate documentation that Quiros had the authority to open at least four margin accounts at the firm. Another registered representative at Raymond James permitted Quiros to transfer $13 million of the funds to purchase Jay Peak “despite written instructions that investor funds were not to be used for that purpose.” Raymond James is forced to pay the receiver $4.5 million in order to reimburse possible claims by investors, another $200,000 to Vermont’s Department of Financial Regulation for the investigation cost and $1.25 million to the state as an administrative penalty. The alleged wrongdoing occurred at a Raymond James branch office in Miami, Florida. FINRA claimed that Raymond James was fined a combined $16 million for “widespread failures” in their anti-money laundering program in May. At the time, it was the largest penalty that the regulator has ordered for that type of infraction.