By Joe Rauch
CHARLOTTE, N.C., Aug 25 (Reuters) - 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.
Claimants Rex and Sherese Glendenning alleged Raymond James & Associates, a subsidiary of Raymond James Financial Inc , and adviser Larry Milton failed to disclose the inherent risks of auction rate securities investment, according to the Aug. 20 ruling released on Wednesday by the Financial Industry Regulatory Authority.
A Raymond James spokeswoman declined to comment.
Auction rate securities were a highly liquid investment before the market for the securities collapsed in early 2008, as investors lost millions.
The securities have become a hub of litigation for brokerage and securities firms.
The Glendennings allege that in January 2008, just before the auction securities market collapsed, Milton recommended they invest in an auction rate security, and did not disclose the risks of buying the securities, the filing stated.
The claimants also alleged they requested Raymond James repurchase the securities -- a common practice after the market for them collapsed -- but the company declined to do so, the filing stated.
In exchange for the $925,000 in compensatory damages, the Glendennings will transfer ownership of their auction rate securities to Raymond James & Associates, according to the filing.
The couple had originally requested compensatory damages of $1.4 million.
(Reporting by Joe Rauch, editing by Matthew Lewis) Keywords: RAYMONDJAMES/FINRA (joe.rauch@thomsonreuters.com; + 1 704 692 5885; Reuters Messaging: joe.rauch.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
CHARLOTTE, N.C., Aug 25 (Reuters) - 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.
Claimants Rex and Sherese Glendenning alleged Raymond James & Associates, a subsidiary of Raymond James Financial Inc , and adviser Larry Milton failed to disclose the inherent risks of auction rate securities investment, according to the Aug. 20 ruling released on Wednesday by the Financial Industry Regulatory Authority.
A Raymond James spokeswoman declined to comment.
Auction rate securities were a highly liquid investment before the market for the securities collapsed in early 2008, as investors lost millions.
The securities have become a hub of litigation for brokerage and securities firms.
The Glendennings allege that in January 2008, just before the auction securities market collapsed, Milton recommended they invest in an auction rate security, and did not disclose the risks of buying the securities, the filing stated.
The claimants also alleged they requested Raymond James repurchase the securities -- a common practice after the market for them collapsed -- but the company declined to do so, the filing stated.
In exchange for the $925,000 in compensatory damages, the Glendennings will transfer ownership of their auction rate securities to Raymond James & Associates, according to the filing.
The couple had originally requested compensatory damages of $1.4 million.
(Reporting by Joe Rauch, editing by Matthew Lewis) Keywords: RAYMONDJAMES/FINRA (joe.rauch@thomsonreuters.com; + 1 704 692 5885; Reuters Messaging: joe.rauch.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.