Tuesday, October 23, 2007

Ameriprise Financial charged with fraud

The New Hampshire Bureau of Securities Regulation has accused Ameriprise Financial of breaking state securities laws by forging and tampering with documents.

The complaint, which was posted on the regulator's website, alleges that the brokerage company also failed to deliver nearly 500 financial plans, conducted unapproved sales contests and intentionally limited compliance oversight.

Additionally, the Minneapolis-based brokerage company was accused of failing to adequately release all fraudulent activities to the state of New Hampshire while it was under supervision by the state and by an independent consultant in 2005.

The regulator said that the company could face penalties and client restitution of up to $10 million.

In 2005 the company, formerly known as American Express Financial Advisors, settled with the state for $7.4 million on charges related to illegal incentives, conflicts of interest and lack of disclosure to clients.

As a result of the action, which was the largest in state history, the company has been under heightened supervision by the state and by an independent consultant.

Ameriprise maintains approximately 30 branch offices in New Hampshire.

The purpose of posting this is not to take a shot at Ameriprise. Rather, I believe that most people would benefit by working with a trustworthy, competent financial advisor. News like this undermines the profession's collective credibility, serves to disincent people that would otherwise seek advice, and ultimately hurts the consumer.

Investment News


Uncle Ben said...

My dad worked for the company as a financial adviser for 22 years, retiring two years ago. I'm sure that he would be extremely displeased by this news as he always went out of his way to be aboveboard, even if it hurt his bottom line. Shame on those responsible.

Bike Bubba said...

Yikes--I deal with them, though I've got no reason to fear, I think. I also believe that this isn't the first time they've been caught like this.

jroosh said...

Actually, unfortunately such is not the case:

Financial Planning
Class Action Suit (pushing propreitary funds)
Arbitration Award

Anonymous said...

Ameriprise continues to push selected fund families. Some advisors will only sell fund families that give them cash. Read your prospectus or the statement of additional information. They may call it "paying for shelf space" but its really Payola. If your financial advisor is having lunch with a wholesaler it probably cost you $10,000 last year. How many lunches can you afford.