Raymond James ordered to pay $12 million, forced to restate earnings

An arbitration panel has ordered Raymond James Financial to pay $12 million, saying it was liable in a case involving broker raiding.

The FINRA decision involves a raid of four A.G. Edwards & Sons branches in Indiana, Illinois and Arkansas in the wake of the May 2007 announcement by Wachovia Securities that it was buying Edwards. Wachovia was subsequently sold to Wells Fargo Advisers.

The decision, which Raymond James described Wednesday as "unanticipated," forced the St. Petersburg brokerage firm to restate its earnings for the quarter ended Dec. 31. It took an expense charge of $10.75 million. The net result to Raymond James shareholders: a decrease in net income of $6 million and decrease in diluted earnings per share of four cents.

The arbitration panel did not provide an explanation for its decision. In a statement, Raymond James said it disagrees with the panel and believes that the financial advisers involved were "evaluating other affiliation alternatives at the time" in response to A.G. Edwards' takeover.

Raymond James said it is reviewing options but acknowledged that it is difficult to appeal arbitration panel decisions.

Shares in Raymond James closed at $26.73, down 37 cents.