While Ameriprise Financial will likely be stepping in soon to mediate a settlement regarding its embattled broker-dealer subsidiary, Securities America, recruiters say that many Securities America reps are already contemplating jumping ship.
Securities America, Ameriprise and the plaintiffs’ attorneys involved in the class action settlement that was rejected by a U.S. district judge in Dallas on March 18, will be meeting in Chicago on Thursday to mediate a settlement, according to one recruiter who has requested anonymity. The plaintiffs’ attorneys will likely come to the table with a “higher amount” than the current "eight cents on the dollar" that Securities America’s customers were to receive, the recruiter says.
While Ameriprise Financial did not respond to requests by AdvisorOne to comment for this story, the company did release the following statement on its website: Ameriprise said that while "it has no financial obligation to participate in Securities America's settlement discussions, we have reached out to Securities America to determine if we can help the parties find a reasonable resolution for all constituents."
Ameriprise went on to say that Securities America was one of "many firms that distributed Medical Capital and Provident Shales securities." The securities, Ameriprise said, which were registered with the Securities and Exchange Commission (SEC) as Reg D offerings, "is a widely distributed asset class."
The recruiter said that while this potential new settlement would be good news for Securities America, “even if [the BD] settles with all of the plaintiffs’ attorneys, [Securities America] still has the Montana and Massachusetts [suits] sitting on the sidelines” with other states “coming after them. I don’t see how [Securities America] survives this.”