Ameriprise Fined Over Failure to Follow Up on Theft Suspicions
Finra has fined Ameriprise Financial $850,000 for failing to supervise a former registered representative who over the course of two years appropriated more than $370,000 from accounts belonging to his family members, the regulator says in a press release.
Ameriprise failed to act on several red flags during that time, including nine wire requests to transfer funds from client accounts to a bank account associated with one of the firm’s reps, who the regulator doesn’t name.
The rep, who was working as a sales assistant and office manager at the time, fleeced his mother, step-father, grandparents and domestic partner from October 2011 to September 2013 by requesting wires from the Ameriprise brokerage accounts to a business bank account associated with his office, ostensibly for investments, Finra says in its press release.
But instead, the rep used the funds to pay himself extra salary, commissions and other money, according to the regulator.
His scheme was uncovered when a colleague discovered evidence in the office trash that the rep was practicing the signature of one of his family members, according to the press release.
Finra barred the rep from the industry in 2014, the regulator says, while Ameriprise paid restitution, interest and related fees to the affected customers once the fraud was revealed.
In the recent ruling, Finra alleges that in addition to failing to act on the suspicious wire requests, Ameriprise also failed to follow up on the irregularities it found and flagged in signatures on several wire requests, according to the press release.