Ameriprise Fined For Broker Preying On Own Family

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Ameriprise Fined For Broker Preying On Own Family

FINRA announced that it has fined Ameriprise Financial Services $850,000 for failing to detect that a broker was moving customer money to a business account for personal profit.  The registered representative, who worked as a sales assistant and office manager, took over $370,000 from five Ameriprise customers between October 2011 and September 2013. These customers included his mom, step-dad, and grandparents, as well as his domestic partner.

The transfer of family members’ money to a business account associated with the broker went undetected for almost two years because Ameriprise did not sufficiently monitor the transmittal of customer funds to third parties, according to the regulatory authority. The misconduct was uncovered in September 2013 when an employee found evidence in a trash can that the representative had been practicing the signature of a family member from whom he was plotting to take funds, said FINRA.

“Firms need to pay special attention when funds are wired from customer brokerage accounts to accounts controlled by registered representatives,” Brad Bennett, FINRA’s chief of enforcement, said in the statement. They’ll be “held responsible when their representatives use their insider status to prey upon customers.”

As part of his scheme, the office manager submitted request forms to transfer funds from the customers’ brokerage accounts into the business bank account of the office in which he worked, allegedly to make investments, according to the statement. He then took funds from that account to pay himself additional salary and commissions he had not earned, FINRA found.

“Ameriprise failed to adequately investigate red flags associated with nine third-party wire requests, including that the funds were being transmitted to a business bank account associated with an Ameriprise representative,” according to FINRA.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

By |September 15th, 2016|Legal Matters|

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