The Securities and Exchange Commission (SEC) has announced that Ameriprise Financial Services Inc. will pay $4.5 million to settle charges that it failed to safeguard retail investor assets from theft by its representatives.
According to the SEC’s order, five Ameriprise representatives committed numerous fraudulent acts, including forging client documents, and stole more than $1 million in retail client funds over a four-year period. The SEC found that Ameriprise, a registered investment adviser and broker-dealer, failed to adopt and implement policies and procedures reasonably designed to safeguard investor assets against misappropriation by its representatives.
The five representatives were based in Minnesota, Ohio, and Virginia, and three previously pled guilty to criminal charges. Each of the representatives was terminated by Ameriprise for misappropriating client funds. The SEC’s order found that Ameriprise has implemented a new system to safeguard clients’ money and that Ameriprise reimbursed all impacted clients for the losses they incurred due to the misconduct of the five representatives.
A critical obligation of an investment adviser is to safeguard investor assets,” said Fuad Rana, an Assistant Director in the SEC’s Division of Enforcement. “Ameriprise failed to meet that obligation and as a consequence was unable to prevent the theft of its clients’ assets.
The SEC’s order charged Ameriprise with failing to have reasonably designed policies and procedures to prevent its representatives from misappropriating client funds and failing to reasonably supervise the five representatives. Without admitting or denying the findings, Ameriprise agreed to be censured and pay a penalty of $4.5 million.
The SEC’s investigation was conducted by H. Norman Knickle and supervised by Mr. Rana, and was assisted by Thomas Meier, Josh Herbst, and Susan M. Weis of the Chicago Regional Office’s examination staff. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.