Ameriprise Financial Services to Pay $4.5 Million SEC Penalty

Ameriprise Financial Services (AMP) will pay $4.5 million to settle charges made by the US Securities and Exchange Commission that it failed to protect investors’ cash from representatives of the company who committed “numerous fraudulent acts.”

The regulator’s order said Ameriprise failed to have policies and procedures to prevent misappropriation of client funds by representatives of the company that offers financial planning, brokerage services and investment management.

“A critical obligation of an investment adviser is to safeguard investor assets,” said Fuad Rana, an assistant director in the SEC’s enforcement division. “Ameriprise failed to meet that obligation and as a consequence was unable to prevent the theft of its clients’ assets.”

The SEC said five representatives were fired by Ameriprise after their alleged theft of more than $1 million in retail client funds over a four-year period. Three previously pled guilty to criminal charges, the SEC said, without giving details about the others.

Ameriprise neither admitted nor denied the SEC’s findings, but agreed to be censured and pay the penalty. The company “has implemented a new system to safeguard clients’ money and that Ameriprise reimbursed all impacted clients for the losses they incurred due to the misconduct of the five representatives,” the SEC said.