Raymond James Firm Is Accused of Fraud
The Securities and Exchange Commission on Thursday sued Florida-based brokerage Raymond James Financial Inc. and its former president for failing to police a broker accused of stealing from investors.
The SEC accused the company, which has 2,200 offices, of fraud over an alleged scam by Dennis Herula, 56, a former broker in Rhode Island.
Herula, awaiting trial on criminal charges, solicited $44.5 million from investors, promising “astronomical returns,” before Raymond James fired him in December 2000, the SEC said.
The SEC rarely sues brokerages for fraud based on a low-level employee’s conduct; the claim against Raymond James shows the agency’s willingness to pursue sanctions against a firm when senior managers disregard abuses, SEC enforcement chief Stephen Cutler said.
Raymond James said it would defend itself.