The latest compliance issues in wealth management across North America.

Ameriprise Financial Services
The US Securities and Exchange Commission announced that Ameriprise Financial Services will pay $4.5 million to settle charges that it failed to safeguard retail investor assets from theft by its representatives. 

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 said. The watchdog 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 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 affected clients for the losses that they incurred due to the misconduct of the five representatives.

“A critical obligation of an investment advisor is to safeguard investor assets,” Fuad Rana, an Assistant Director in the SEC’s Division of Enforcement, said. “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 to or denying the findings, Ameriprise agreed to be censured and pay a penalty of $4.5 million.