Published on:

Former Ameriprise Representative Under FINRA Investigation for Outside Business Activities

Jim Seol of Lake Forest, California was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint that alleges he engaged in outside business activities and participated in private securities transactions without providing notice or receiving approval from his associated firm.  Mr. Seol entered the securities industry in 1997 and was registered as a General Securities Representative (GSR) for Ameriprise Financial Services, Inc. (Ameriprise) until his termination in May 2014.

The FINRA complaint alleges that from September 21, 2011 through June 4, 2014, Mr, Seol engaged in outside business activities and participated in private securities transactions without providing prior written notice or receiving written approval by his member firm. While still associated with Ameriprise, Mr. Seol formed Western Regional Center, Inc. (WRCI), a California corporation, as President and CEO. Through WRCI, Seol solicited investments in California Energy Investment Fund I, LP (CEIFI), a limited partnership formed by Seol, through WRCI.

FINRA found that as a result of Seol’s selling efforts, 200 foreign nationals invested a total of $100 million in CEIFI. FINRA alleges that Mr. Seol was an active member in soliciting and managing potential investors and did not inform Ameriprise of the creation of WRCI, the formation of CEIFI, or his plans to introduce and recommend an investment in CEIFI to potential investors. Furthermore, FINRA alleges Mr. Seol falsely attested that he had disclosed all current outside business activities and would abide by the firm’s policies and procedures.

The above alleged conduct would be a violation of NASD Rule 3040, FINRA Rules 3270 & 2010. FINRA’s Department of Enforcement has requested findings of fact and conclusions of law that Mr. Seol committed the violations charged and alleged, one or more of the sanctions provided under FINRA Rule 8310(a) be ordered and that Mr. Seol bear such costs of the proceeding as are deemed fair and appropriate under the circumstances in accordance with FINRA Rule 8330.

FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for investment losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise the unsuitable recommendations of its representatives can bring forth claims to recover damages against firms, like Ameriprise, which have a duty to supervise employees in order to protect their customers’ interests.

Have you suffered losses in your Ameriprise account due unsuitable broker activity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Ameriprise stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors’ rights is the right to be informed!  This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida.  For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues.  The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally!  Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.