The original complaint alleges that defendants repeatedly touted its supposedly conservative management practices and avoidance of risky assets associated with subprime residential mortgages. Defendants, however, failed to disclose that Raymond James Financial understated the credit risks of its wholly owned subsidiary's commercial and residential loan portfolios, and failed to set aside adequate reserves for the losses that Raymond James Financial knew, or recklessly disregarded, were forthcoming. On April 14, 2009, Raymond James Financial shocked investors when it announced that results for the second fiscal quarter ended March 31, 2009, would be well below the consensus analysts' estimates. Raymond James Financial also announced that both its commercial and residential portfolios would require higher loss reserves, with the loan loss provision tripling from the previous quarter. In response to such an unexpected sharp increase in loan loss provisions, Raymond James Financial common stock dropped $2.57 per share, or 13.48%, to close at $16.49 per share on April 15, 2009.
On September 1, 2009, Judge Robert P. Patterson signed the Order appointing the Louisiana School Employees' Retirement System as lead plaintiff and approving lead plaintiff’s selection of the law firm of Grant & Eisenhofer P.A. as lead counsel for the plaintiff class. On November 25, 2009, the plaintiffs filed an Amended Class Action Complaint. The defendants responded by filing a motion to dismiss the Amended Class Action Complaint.
On August 16, 2010, Judge Robert P. Patterson granted the defendants’ motion to dismiss. The Amended Complaint was dismissed without prejudice. On August 19, 2010, the Court entered the Clerk's Judgment.