FINRA Fines Raymond James Over Fractional Share Reporting Failures | LeapRate
The Financial Industry Regulatory Authority (FINRA) has censured and fined Raymond James & Associates $125,000 after finding that the firm failed to report roughly 2.56 million fractional share liquidations over nearly seven years.
According to a Letter of Acceptance, Waiver, and Consent (AWC) published by FINRA, the violations occurred from at least January 2018 through October 2024.
During that period, Raymond James did not report the fractional share trades to the FINRA/Nasdaq Trade Reporting Facility or the Over-the-Counter Reporting Facility, in breach of FINRA Rules 6380A, 6622, and 2010.
The case stemmed from a routine FINRA cycle exam. Investigators found that the unreported transactions were linked to the firm’s dividend reinvestment program (DRIP), which automatically reinvests dividends into additional shares, sometimes creating fractional positions.
When clients sold or transferred these fractional holdings, Raymond James treated the liquidations as internal journal entries rather than reportable trades, and consequently did not pay the associated Section 31 regulatory transaction fees owed to the Securities and Exchange Commission.
FINRA also determined that Raymond James lacked an adequate supervisory system to ensure compliance with trade reporting obligations for fractional shares, violating FINRA Rules 3110 and 2010, as the firm had not conducted any reviews specific to this type of transaction.
As part of the settlement, Raymond James, headquartered in St. Petersburg, Florida, and operating around 1,050 branch offices with approximately 8,600 registered representatives, agreed to the censure, the fine, and an undertaking to pay outstanding regulatory transaction fees tied to the unreported trades. The firm neither admitted nor denied the findings.
