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Archive for June, 2011


Raymond James Settles ARS Case and Agrees to $300 million Buyback

As part of a settlement with eight states and the Securities and Exchange Commission, Raymond James Financial Inc. will buy back $300 million in auction-rate securities from clients and pay a fine of $1.7 million.

The states in charge of the settlement are Florida and Texas. Other states involved were Indiana, Missouri, New York, North Carolina, Pennsylvania and South Carolina.

Raymond James has 30 days to extend an offer to repurchase the securities, and the offer must be open for 75 days after that initial bid.

FINRA Files Complaint Against David Lerner Associates, Inc.

David Lerner Associates Inc. has been accused of targeting unsophisticated seniors while selling real estate investment trust shares without considering whether the illiquid securities were suitable for its clients.

The brokerage firm misled investors who bought more than $300 million of shares in the $2 billion Apple REIT Ten offering this year, the Financial Industry Regulatory Authority Inc. said last week in a disciplinary complaint posted on its website. The firm denies the allegations, according to a statement.

In soliciting customers for Apple REIT Ten, the firm provided misleading information about distribution rates for a series of predecessor securities that now are closed to investors, Finra said.

The firm has sold almost $6.8 billion of Apple REIT shares to more than 122,000 customers since 1992, according to Finra. Those sales have generated more than $600 million, accounting for more than 60% of the firm’s business since 1996, Finra said.

The complaint is the first step in a formal proceeding, Finra said. It isn’t filed in court, and the firm can request a hearing before a disciplinary panel, the regulator said in its statement.

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