The Securities and Exchange Commission has charged Ameriprise Financial Services for failing to safeguard client assets.
Ameriprise will pay $4.5m to settle charges that it failed to safeguard retail investor assets from theft by its representatives. According to the US regulator, five Ameriprise representatives committed numerous fraudulent acts, including forging client documents, and stole more than $1 million in retail client funds over a four-year period.
The SEC said the registered investment adviser and broker-dealer failed to adopt and implement policies and procedures reasonably designed to safeguard investor assets against misappropriation by its representatives. Each of the representatives was terminated by Ameriprise for misappropriating client funds.
“A critical obligation of an investment adviser is to safeguard investor assets,” said Fuad Rana, an Assistant Director in the SEC’s Division of Enforcement. “Ameriprise failed to meet that obligation and as a consequence was unable to prevent the theft of its clients’ assets.”
According to the SEC’s order, Ameriprise has implemented a new system to safeguard clients’ money and the firm has reimbursed all impacted clients for the losses they incurred due to the misconduct of the five representatives.
The Securities and Exchange Commission also recently charged two firms and 18 individuals in a scheme to improperly divert new issue municipal bonds to broker-dealers at the expense of retail investors.
According to the SEC’s complaint, the defendants, known in the industry as ‘flippers’, purchased new issue municipal bonds, often by posing as retail investors to gain priority in bond allocations. The defendants then ‘flipped’ the bonds to broker-dealers for a fee. The SEC also charged a municipal underwriter for accepting kickbacks from one of the flippers.
The regulator has also obtained permanent officer-and-director and penny stock bars against the founder of a company who perpetrated a fraudulent initial coin offering (ICO) to fund oil exploration and drilling in California. “Investors should be alert to the risk of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs,” said Robert A. Cohen, chief of the SEC’s Cyber Unit.
Following the announcement, the SEC’s Office of Investor Education and Advocacy (OIEA) issued an Investor Alert to encourage investors to check the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
