Ameriprise Financial Services, Inc. ("Ameriprise"), a Minnesota-based broker-dealer and investment adviser, agreed to settle SEC charges resulting from allegations that the firm recommended and sold higher-fee mutual fund shares to retirement account customers and failed to provide sales charge waivers.
According to an Order Instituting Proceedings, Ameriprise collected approximately $1.7 million in avoidable charges and fees by selling certain retirement account customers expensive mutual fund share classes without first presenting more affordable options. The SEC alleged that representatives at Ameriprise did not review customers' eligibility for less expensive mutual funds, and instead recommended and sold those that would garner the most profits, including those with upfront sales charges and ongoing management fees. In addition, the representatives allegedly failed to appropriately notify customers of Ameriprise's conflict of interest.
The SEC charged Ameriprise with violating Securities Act Sections 17(a)(2) and 17(a)(3), which prohibit any person in the offer or sale of securities from profiting at the expense of the purchaser through misinformation. To settle the charges, Ameriprise agreed to a cease-and-desist order and a censure, and to pay a civil money penalty of $230,000 to the SEC. The SEC estimated that approximately 1,791 customer accounts were subject to unnecessary charges and fees due to Ameriprise's actions.
Ameriprise made no admissions in connection with the settlement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.