Ameriprise Financial Services Inc. will pay $4.5 million to settle charges with the Securities and Exchange Commission that it failed to safeguard retail investor assets from theft by its representatives.
According to the SEC’s order, 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 found that Ameriprise, a registered investment adviser and broker-dealer with a national network of approximately 9,700 representatives, failed to adopt and implement policies and procedures reasonably designed to safeguard investor assets against misappropriation by its representatives.
“A critical obligation of an investment adviser is to safeguard investor assets,” said Fuad Rana, an assistant director in the SEC’s Division of Enforcement, in a statement. “Ameriprise failed to meet that obligation and as a consequence was unable to prevent the theft of its clients’ assets.”
According to the SEC, Ameriprise employed certain automated surveillance tools to prevent and detect whether a representative may have engaged in fraud by misappropriating funds from a client account. One system did not function properly and a second faced limitations, thereby preventing Ameriprise from detecting the misappropriation of more than $1 million in client funds by the five representatives.