Raymond James & Associates Inc. charged excessive fees and failed in its responsibilities to investors in Family Group Broadcasting L.P., according to a complaint a group of the investors filed against the St. Petersburg brokerage firm this week.
In 1987, Raymond James raised $11.5-million for the partnership, which bought television and radio stations. Most of the investors in the complaint paid $10,000 to $30,000 for their holdings, expecting to make a profit when the stations were later sold. However, the partnership ran into financial and management difficulties and failed to live up to investors' expectations.
Family Group is suing one of its former general partners, Ian "Sandy" Wheeler, contending he stole or mismanaged partnership funds. He has denied that charge.
Wheeler was found guilty in Hillsborough County Circuit Court last month of misusing investors' money in partnerships he managed.
The complaint against Raymond James, being brought by 67 investors, was filed with the American Arbitration Association, a private forum for resolving disputes.
The complaint says Raymond James did not adequately investigate or disclose to them Wheeler's personal finances or the financial problems his other partnerships were having.
In addition, it says the underwriting and management fees charged to the partnership were excessive. The complaint also contends that Raymond James made false and misleading statements in marketing the partnership to investors. They are asking for their money back, with interest, and for punitive damages.
In addition to naming Raymond James, the investors' complaint names RJ Telecommunications Inc., a sister company that is one of the general partners in Family Group, and various Raymond James officers and brokers. It does not name Wheeler, who was sentenced to 15 years' probation and ordered to pay more than $5-million in restitution in the recent criminal case.
"The fact of the matter is that the Wheeler family had an impeccable reputation in the community at the time" the partnership was organized, said Raymond James spokesman Lawrence Silver. However, he declined to comment on the specific allegations in the complaint.
Wheeler was well known for his success in developing WFTS-Ch. 28 with a $4.5-million investment and selling it less than three years later for $31.4-million. His wife Martha was prominent in Republican political circles.