Ameriprise Financial Services, Inc. has been fined $850,000 by the Financial Industry Regulatory Authority (FINRA) after the company failed to detect that one of its registered representatives converted over $370,000 from five separate customer brokerage accounts.
According to FINRA, Ameriprise’s broker took the funds from the accounts of his own family members, including his domestic partner, mother, grandparents, and step-father between October of 2011 and September of 2013. Ameriprise reportedly failed to follow up on any of the red flags raised by the funds being transferred from customer accounts to the personal bank account of one of its brokers. It also apparently failed to properly investigate the flagged signature irregularities present on various wire request forms, as well as nine wire requests flagged for separate reasons.
The Executive Vice President and Chief of Enforcement at FINRA Brad Bennett commented on the fine, saying that:
“Ameriprise failed to exercise reasonable diligence in supervising the transmittal of customer funds to third- party accounts. Firms need to pay special attention when funds are wired from customer brokerage accounts to accounts controlled by registered representatives, and will be held responsible when their representatives use their insider status to prey upon customers.”
Ameriprise consented to the entry of FINRA’s findings, and settled the matter without admitting or denying any of the charges.
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