The Financial Industry Regulatory Authority has fined Ameriprise Financial Services Inc. and American Enterprise Investment Services Inc. $750,000 for failing to properly supervise wire-transfer requests and customer fund transmissions to third parties. Also, the SRO has barred Jennifer Guelinas, an ex-Ameriprise broker, for allegedly forging the signatures of two clients on wire-transfer requests and moving about $790,000 to her bank accounts. Ameriprise is an American Financial Inc. (AMP) unit.
FINRA said that Ameriprise had gone on to pay full restitution to its clients and that it was the latter’s affiliate clearing firm, American Enterprise Investment Services, that failed to put in supervisory systems for monitoring funds when they were transferred from client accounts to third parties. The SRO contends, however, that it was Ameriprise that did not detect that Guelinas wrongful actions even though there were a number of red flags. For example, she turned in three requests to send funds from a client’s account to bank account that appeared to belong to her. Amerirpise went ahead and put through the forged requests and moved the funds without asking questions. A third wire-transfer request by Guelinas also went through, says FINRA, but this time Ameriprise caught the wrongdoing before she could get to the money.
Amerirpise says that the since these incidents, which occurred several years ago, the financial firm has improved its related procedures, policies, and technology. By settling, Ameriprise and American Enterprise Investment Services are not admitting to or denying the securities allegations.
Failure to Supervise
Written supervisory procedures must be implemented correctly and effectively at every brokerage firm. Failure to supervise can more easily allow broker fraud to occur undetected, potentially causing serious losses for investors. Not only can broker-dealers be liable for stockbroker fraud but even if the broker isn’t found liable the firm can still be considered financially accountable.
Last year, Guelinas pleaded guilty to the criminal charge of wire fraud. Prosecutors had accused her of transferring over $800 from a client’s account to her own account and using a forged signature to make the transaction happen. While the crime she committed is punishable by 20 years behind bars, in the wake of her plea deal she stood to face 12 months in prison.
If you have been the victim of securities fraud, you could be entitled to financial recovery. Your securities case would be separate from any criminal proceeding and the outcome of the two would be unrelated, meaning even if the person that defrauded you was not charged or found/pleaded guilty, you could still obtain damages. Your chances of recovery, and of getting back as much of your loss as possible, goes up when you work with an experienced investment fraud law firm.
Former Valpo financial adviser admits stealing $800,000 of client’s money, Chesterton Tribune, May 8, 2012
Finra Fines Ameriprise, Clearing Unit $750,000 For Lack of Supervision, Wall Street Journal, March 4, 2013
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Morgan Stanley, Citigroup, Wells Fargo, and UBS to Pay $9.1M Over Leveraged and Inverse ETFs, Stockbroker Fraud Blog, May 3, 2012
Principals of Global Arena Capital Corp. and Berthel, Fisher & Company Financial Services, Inc. Settle FINRA Securities Allegations, Stockbroker Fraud Blog, April 6, 2012
SEC Needs to File Securities Fraud Lawsuits Sooner, Rules the US Supreme Court, Institutional Investor Securities Blog, February 28, 2013