Ameriprise Financial, Inc. Rotten Score Breakdown

The SEC charged Ameriprise Financial Services with failing to adopt and implement policies and procedures reasonably designed to protect retail client assets from misappropriation by its representatives. The SEC found that five Ameriprise representatives committed numerous fraudulent acts, including forging client documents, and stole more than $1 million from retail clients over a four-year period. The representatives were located in Minnesota, Ohio and Virginia. Three had previously pleaded guilty to criminal charges, and all five were terminated by Ameriprise for misappropriating client funds. The SEC found that Ameriprise's safeguarding policies and procedures were inadequate to prevent or detect the misconduct. Ameriprise agreed to pay a $4.5 million civil penalty to settle the charges. Primary source: SEC — Ameriprise Financial Services Charged for Failing to Safeguard Client Assets: https://www.sec.gov/newsroom/press-releases/2018-154

The SEC brought a separate enforcement action against American Express Financial Corporation, now Ameriprise Financial, concerning market timing in mutual funds it advised. The SEC found that the firm permitted certain shareholders to engage in market timing even though prospectus disclosures for the American Express Funds stated that such market timing was prohibited. The conduct created a conflict between the restrictions described to ordinary investors and the treatment provided to selected market timers. Ameriprise agreed to pay $15 million in disgorgement and civil penalties, with the money placed into a Fair Fund for affected shareholders. It also agreed to governance and compliance undertakings concerning market timing. Primary source: SEC — Ameriprise Financial to Pay $15 Million to Settle Market Timing Charges: https://www.sec.gov/news/press/2005-169.htm

The U.S. Securities and Exchange Commission brought settled enforcement proceedings against American Express Financial Advisors Inc., now known as Ameriprise Financial Services, over undisclosed revenue-sharing arrangements involving mutual funds. The SEC found that beginning in 2001 the firm received substantial revenue-sharing payments and directed brokerage commissions from selected mutual-fund families whose products it distributed to customers. The firm did not adequately disclose the conflicts created by those financial incentives. Ameriprise agreed to pay $30 million in disgorgement and civil penalties. The money was placed into a Fair Fund for distribution to affected customers, and the firm agreed to improve disclosures concerning its revenue-sharing program. Primary source: SEC — American Express Financial Advisors, now Ameriprise Financial Services, to Pay $30 Million: https://www.sec.gov/news/press/2005-168.htm