Ameriprise Financial Services has agreed to pay $4.5m to resolve allegations by the US Securities and Exchange Commission (SEC) of failing to protect assets of retail investors from theft by representatives.
The regulator alleged that five representatives of the firm stole over $1m in client assets for four years through various fraudulent means such as document forgery.
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Even though the company dismissed the accused representatives and reimbursed affected customers, it failed to implement effective policies to prevent misappropriation of investor assets, SEC said.
The firm was also accused of failing to reasonably monitor the accused representatives, who were based in Minnesota, Ohio, and Virginia. Moreover, three of these representatives formerly pled guilty to criminal charges.
SEC assistant director in division of enforcement Fuad Rana said: “A critical obligation of an investment adviser is to safeguard investor assets. Ameriprise failed to meet that obligation and as a consequence was unable to prevent the theft of its clients’ assets.”
The firm agreed to the settlement without admitting or denying the charges. It has now also deployed a new system to safeguard investor assets.
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By GlobalData“The actions of these five individuals were in clear violation of our policies and resulted in their immediate separation from the firm. We fully reimbursed clients who were impacted after the activity was discovered,” Ameriprise said.
