Ameriprise Financial Services Complaints & Regulatory Actions

Ameriprise Financial Services, LLC (“Ameriprise”) (CRD#: 6363) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors. At the Law Offices of Robert Wayne Pearce, we have investigated Ameriprise Financial Services complaints, its regulatory problems, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.

If you believe you have a claim against Ameriprise, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Can I Sue Ameriprise Financial Services, LLC?

If you’ve lost money caused by Ameriprise and/or its employees’ misconduct then the answer is, YES,  you can sue Ameriprise but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding.  Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Ameriprise in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Ameriprise is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is Ameriprise Financial Services, LLC?

The formation of Ameriprise Financial Services, LLC (“Ameriprise”) (CRD#: 6363) as a broker-dealer dates back to 1972 when it was formed and known as American Express Financial Advisors, Inc.  Since then there have been name changes and restructuring through acquisitions and mergers.  The company is controlled by AMPF Holding, LLC and headquartered in Minneapolis, Minnesota with multiple affiliates and all aspects of the financial industry in large corporate offices throughout the United States.  Its independent broker-dealer Business Model has grown through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 180 branch offices with over 12,000 registered representatives in every state.  It is one of the top ten largest broker-dealer and investment advisory firms in the United States.

Ameriprise Financial Services, LLC has Many Different Regulatory Problems 

Ameriprise’s rapid growth has not been without consequences. There have been over 137 Federal, state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) ) for a violation(s) of investment-related rules or regulations. In addition, there have been thousands of customer complaints filed against Ameriprise for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record. 

We have reported and written about these regulatory problems and customer complaints over many years. Ameriprise is a repeat offender: there are over 17 FINRA reported disciplinary proceedings citing the firm with one form of supervisory lapses or another in the last decade.

A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS AMERIPRISE FINANCIAL SERVICES, LLC HAS FACED OVER THE YEARS*

Ameriprise has been repeatedly censured, warned, and fined millions for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:

Ameriprise Fined And Censured For Municipal Bond Trading Violations

The FINRA Department of Market Regulation’s Municipal Securities Bonds Team and the Department of Member Regulation (collectively, the “staff’) reviewed the firm’s municipal securities trading for compliance with Municipal Securities Rulemaking Board (“MSRB”) requirements and found the firm violated MSRB Rules G-15(f) and G-19, related disclosure requirements under MSRB Rules G-17 and G-47, and related supervisory requirements under MSRB Rule G-27.  FINRA found Ameriprise effected municipal bond transactions in amounts below the minimum denomination set for the bonds. The firm recommended transactions limited the sale/resale of such securities to Qualified Institutional Buyers (“QIBs”), as defined in Rule 144A of the Securities Act of 1933 to customers who were not QIBs. Additionally, the firm failed to disclose to customers at or prior to the time of the trade that the transaction was being effected in an amount below the minimum denomination and of the above sales restriction. The firm also had an insufficient supervisory system reasonably designed to achieve compliance with the MSRB’s rules regarding minimum denomination and the suitability of recommendations to customers.

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Ameriprise Fined And Censured For Short Term Closed End Fund Trading Violations

Ameriprise participated in the sale of initial public offerings of Closed End Funds (“CEFs”) which are generally intended for use as long-term investments.  Sales charges to the customers who purchased at the time of the initial public offering (IPO”) are built into the offering price of the CEF; in most cases, the market price of the CEFs generally declines after the initial offering. Despite being aware that CEFs purchased at the IPO offering were most suitable for long-term investments and that the sales charges applied to purchases at the IPO made short-term trading of these CEFs generally unsuitable. Ameriprise failed to establish and maintain a supervisory system reasonably designed to detect and prevent at least one of its registered representatives from engaging in unsuitable short-term trading of CEFs purchased at the IPO.

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Ameriprise Censured And Fined For Failure To Prevent Conversion Of Customers Funds

Ameriprise was sanctioned by FINRA for failing to detect and prevent the conversion, via wire transfers of customers’ funds by its registered representatives. The conversion went undetected for two years because Ameriprise failed to establish, maintain, and enforce a supervisory system that was reasonably designed to adequately review and monitor the transmittal of funds from accounts of customers to third parties, including those controlled by registered representatives of the firm.  This was the second time Ameriprise was sanctioned by FINRA for failure to prevent conversion of customer funds. Once again, Ameriprise violated NASD Rules 3010 and 3012 and FINRA Rule 2010 for failing to detect conversion of customer funds.

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Ameriprise Censured And Fined For Not Sending Account Records To Customers

FINRA investigated and found Ameriprise failed to create and send to approximately 219,000 customers an account record within 30 days of the account opening for each of these customers and therefore violated SEC Rule 17a-3, former NASD Rule 3110 (now FlNRA Rule 4511) and FINRA Rule 2010. In addition, in violation of NASD Rule 3010 and FINRA Rule 2010, Ameriprise failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to ensure compliance with applicable laws and regulations relating to the creation and distribution of account records at account opening.

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Ameriprise Fined And Censured For Failure To Deliver Prospectuses

Another FINRA investigation found that Ameriprise failed to timely deliver mutual fund prospectuses to Ameriprise customers within three business days of their purchases in approximately 580,000 transactions (approximately 4% of the mutual fund purchase transactions that required Ameriprise to deliver a mutual fund prospectus within three business days).  Consequently, FINRA concluded Ameriprise failed to establish and maintain adequate supervisory systems and written supervisory procedures reasonably designed to monitor and ensure the timely delivery of mutual fund prospectuses, as required by Section 5(b)(2) of the Securities Act of 1933 (“the Securities Act”). As a result of these failures, Ameriprise violated NASD Conduct Rules 3010(a)(1) and (b)(1), and FINRA Rule 2010.

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Ameriprise Sanctioned For Failing To Detect Forgeries Of Customers Signatures And Prevent Theft

FINRA investigated and found that a Ameriprise registered representative converted approximately hundreds of thousands of dollars from two customers by forging signatures and submitting false wire requests to move funds from these customers’ brokerage accounts directly to bank accounts that the Ameriprise representative controlled. In failing to detect this misconduct for nearly four years, FINRA concluded missed numerous supervisory red flags.  Consequently, FINRA found and concluded that Ameriprise did not have supervisory systems that were reasonably designed to adequately review and monitor the transmittals of funds from customer accounts to third-party accounts. Through this conduct, Ameriprise violated NASD Conduct Rules 3010, 3012 and 2110 and FINRA Rule 2010.  Further, FINRA found that Ameriprise did not properly protect customer records and information. Through this conduct, AFSI violated Rule 30 of Regulation S-P, NASD Conduct Rule 3010 and FINRA Rule 2010.

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Ameriprise Sanctioned For Variable Annuity Sales Abuse

One of Ameriprise’s subsidiaries, H&R Block Financial Advisors, employed representatives who executed unsuitable variable annuity switches involving multiple customers.  Variable annuity switching involves using the proceeds from the liquidation of one variable annuity to purchase a new variable annuity issued by a different annuity company resulting in the imposition of contingent deterred sales charges or surrender charges and new and extended surrender periods. The customers received no significant benefit from these transactions, since the variable annuities purchased were not substantially different from those they replaced. Accordingly, FINRA found that Ameriprise through its subsidiary, H&R Block Financial Advisors, violated NASD Rules 2310 and 2110.

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FINRA Sanctions Ameriprise For Proprietary Product Sales Incentive Programs

FINRA investigated and found Ameriprise awarded non-cash compensation to employees through sales incentive programs, based, in part, on criteria that favored or gave additional weight to the sale of the firm’s proprietary mutual funds. These employees were awarded trips and credits to redeem for jewelry. The firm also awarded certain employees long-term incentive awards in the form of stock options and restricted stock awards based, in part, on the results of those sales.  FINRA found the incentive programs were not based on the total sales of associated persons with respect to all investment company securities distributed by Ameriprise. These incentive programs also failed to give equal weight to the sale of all investment company products. Accordingly, the non-cash compensation incentive programs used by Ameriprise violated NASD Rules 2830(l)(5)(D)(i) and (ii) and 2110.

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FINRA Sanctioned Ameriprise For Preferential Compensation For Certain Mutual Fund Sales

FINRA found violations of NASD Rule 2830(k), which prohibits member firms from favoring or disfavoring the sale or distribution of mutual fund shares on the basis of brokerage commissions received by the firm, prohibits member firms from arranging for a specific amount or percentage of brokerage commissions to be directed to the firm conditioned on the firm’s sale of mutual fund shares, and prohibits member firms from recommending the purchase of in mutual fund shares on’ the basis of brokerage commissions received or expected to be received by the firm from any source.  During the time Ameriprise was known as American Express Financial Advisors (“AEFA”), the company maintained two shelf space (or revenue sharing) programs in which participating mutual fund’ complexes paid a fee in return for preferential treatment by the firm.  That treatment included enhanced access to the firm’s sales force and the posting of participant sales materials and information about the participants’ funds on AEFA’s internal website. Seven of the fund complexes paid their fees for participating in the programs by directing approximately $41 million in mutual fund portfolio brokerage commissions to the firm. Those payments violated NASD Conduct Rules 2830(k) and 2110.

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Ameriprise Sanctioned For 529 Plan Sales Abuse Violations

FINRA investigated and found that Ameriprise formerly known as American Express Financial Advisors (“AEFA”) sold over $1.1 billion of 529 college savings plans (“529 plans”) to over 138,000 customer accounts. During this period, AEFA failed to establish and maintain procedures, including written supervisory procedures that were reasonably designed to achieve compliance with suitability obligations as they related to the sale of 529 plans. In fact, during the period when AEFA sold over $625 million of 529 plans to its customers, the firm had no effective procedures in place specifically addressing the firm’s suitability obligations relating to the sale of 529 plans. Most of the procedures in place at that time were general compliance requirements relating to the sale of all products offered by AEFA. 

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Ameriprise Sanctioned For Cheating Customers Out of Sales Discounts They Were Entitled

FINRA, formerly the NASD along with the SEC censured and fined Ameriprise, formerly, American Express Financial Advisors (“AEFA”) millions of dollars and ordered the firm to undertake certain remedial and corrective measures relating to providing refunds to customers who did not receive appropriate mutual fund Class A share breakpoint discounts. The sanctions were based on AEFA’s failure to provide mutual fund breakpoint discounts as described in relevant fund prospectuses in violation of NASD Conduct Rule 2110.

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Why Does Ameriprise Financial Services, LLC Have So Many Regulatory Problems And Customer Complaints?

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers. 

Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.

These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.

Did Ameriprise Financial Services, LLC Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Ameriprise is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Ameriprise without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By Ameriprise Financial Services, LLC Today!

The securities lawyers at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Ameriprise cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.

Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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