Ameriprise Branches Face Potential Fines for Fake Financial Plans
Ameriprise Financial Services has long been accused of possessing a culture that’s more concerned with sales commissions than compliance. The latest allegations against the company from the New Hampshire Bureau of Securities Regulation suggest that may still be very much the case, at least in that state.
The bureau says Ameriprise engaged in unlawful practices such as forgery and document tampering to artificially inflate sales, and intentionally limited vital compliance oversight, among other things. As a result, the firm, which has 30 New Hampshire-based branches, could face penalties and client restitution in the state of up to $10 million.
“During the past two years we have found that the company’s financial advisors were incentivized and pressured to sell plans to each other and family member so as to give the appearance of increased sales, as well as forging legitimate client’s signatures on certain forms to make their sales look higher,” says Jonas Cutler, a lead enforcement attorney on the case.
The bureau names Ameriprise Group Vice-President, Larry Post, who heads the state’s sales operation for the firm, and alleges that he offered improper sales rewards to advisors and stifled and threatened company compliance personnel. According to the complaint, “due to the intense sales pressure placed on advisors by Post and Ameriprise, advisors engaged in sham plans sales transactions with each other and sold plans to themselves to make it look like their sales numbers were higher.”
This isn’t the first time Ameriprise will be digging into its coffers to pay off regulatory fines in the state. In July 2005, the firm paid $7.4 million to the New Hampshire Bureau of Securities for fines, penalties and restitution related to illegal incentives, conflicts of interest and lack of proper disclosure to its clients.
Nor is New Hampshire the only state crying foul against the firm. Earlier this month, Georgia fined Ameriprise $225,000 after an investigation revealed that two company salespersons forged customer signatures on financial documents they had prepared. The settlement amount includes a civil penalty of $40,000, a $10,000 donation to the Investor Protection Trust for investor education programs in Georgia and nearly $175,000 in investigative costs.
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