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Ameriprise Financial Fined $850,000 for Wire Transfer Supervisory Failures

Ameriprise Financial Services, Inc. (Ameriprise) submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for alleged supervisory failures in connection with wire transfers from customer brokerage accounts and the resulting conversion of over $370,000 by one of its registered representatives.

Ameriprise is headquartered in Minneapolis, Minnesota and employs nearly 14,000 registered representatives in approximately 3,800 branch offices.  FINRA found that from October 2011 to September 2013, a registered representative, working as an office manager, converted more than $370,000 from five Ameriprise customers.  The customers happened to also be the registered representative’s family members, including his mother, step-father, grandparents and domestic partner.  FINRA’s findings state that the Ameriprise employee’s conversion, which occurred via nine wire transfers, went undetected for two years by Ameriprise. 

During the relevant time period, FINRA found that several of the wire transfers were flagged for possible signature discrepancies and reviewed by the firm’s Anti-Fraud Operations Group.  The signatures in question were ultimately approved and processed by Ameriprise.  FINRA goes on to note that the Anti-Fraud Operations Group unsuccessfully attempted to contact a customer following a rejected wire transfer form containing a “recycled” signature, but failed to conduct a follow-up investigation.

FINRA Executive Vice President and Chief of Enforcement, Brad Bennett, said, “Firms need to pay special attention when funds are wired from customer brokerage accounts to accounts controlled by registered representatives, and will be held responsible when their representatives use their insider status to prey upon customers.”  Without admitting or denying FINRA’s findings, Ameriprise was censured and ordered to pay an $850,000 fine.

FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing and safeguard customers’ assets or deposits with the brokerage firm. 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 its representatives can bring forth claims to recover damages against firms, like Ameriprise Financial Services, which have a duty to supervise employees in order to protect their customers’ interests.

Have you suffered losses in your Ameriprise account due to a stockbroker’s unscrupulous misuse of your assets? Have there been any unauthorized withdrawals or wire transfers of funds by third parties due to Ameriprise’s negligence?  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 Financial 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.