Ameriprise Paying $17.3 Million to Settle SEC Case
Ameriprise Financial Services on Friday agreed to pay more than $17 million to settle federal regulators' charges that it failed to disclose nearly $31 million received for selling certain investments to its brokerage customers.
Ameriprise did not admit or deny wrongdoing in its settlement with the Securities and Exchange Commission.
The Minneapolis-based company—which provides financial planning, asset management and insurance with a major focus on baby boomers who have $100,000 to $1 million in assets—did agree to refrain from future violations of the securities laws and to pay $17.3 million in civil fines and restitution.
According to the SEC, Ameriprise did not disclose compensation for selling certain real estate investment trusts to customers between 2000 and May 2004. REITs own and often operate income-producing real estate or related assets such as office buildings, retail stores and hotels.
The SEC alleged in an administrative proceeding that Ameriprise failed to disclose to investors the roughly $30.8 million it received in connection with sales of the REIT shares and the potential conflicts of interest the payments created.
"Few things are more important to investors than getting unbiased advice from their financial advisers," SEC Enforcement Director Robert Khuzami said in a statement. "Ameriprise customers were not informed about the incentives its brokers had to sell these investments."
The SEC also said that Ameriprise sold more than $100 million of shares of one REIT that weren't registered with the agency, a violation of securities laws.
"This is a very old case that hinged on issues of revenue-sharing disclosure that ended in early 2004," Ameriprise spokesman Paul Johnson said. "We long ago expanded our disclosures to ensure that our clients receive the information from us directly as well as through the prospectus of the product issuer."
Ameriprise was spun off from American Express in 2005.