Ameriprise Must Pay Over $2M For Broker Fraud

A Financial Industry Arbitration panel says that Ameriprise Financial (AMP) must pay over $2M to the estate of Glenny B. White for losses related to broker fraud committed by an ex-firm broker. The executor of White’s estate claims that Ameriprise Financial Services did not properly supervise former broker Jeffrey Davis.

In 2014, Davis admitted to stealing money from White and other clients. White was his client for almost ten years before she found out in 2013 that he was stealing funds from her. She died at the age of 91 in 2014.

Davis has since been fired from Ameriprise, and FINRA barred him from the brokerage industry. Last year, he was sentenced to over four years in prison after pleading guilty to wire fraud and admitting to stealing almost $200K from clients.

On Finra’s BrokerCheck report about Davis, it is noted that in at least two cases involving Ameriprise clients the firm had reported to the regulator that their funds were misappropriated.

The FINRA panel is awarding White’s estate $500K in damages and $1.5M in punitive damages. Over $36,800 in sanctions was imposed.

Ameriprise said that it opposes the panel’s ruling in this case. It also noted that it was the one that identified the broker fraud and the firm issued prompt reimbursement. Ameriprise intends to challenge the panel’s decision.

Inadequate Supervision

Financial firms are supposed to properly supervise brokers, investment advisers, and other financial representatives. When inadequate supervision makes it possible for securities fraud to go undetected, or allows for wrongdoing to happen, it is the investor that suffers. Many investors may not know that they have the right to seek recovery of their lost funds and hold these representatives and their firms accountable.

At Shepherd Smith Edwards and Kantas, Limited LLP, our securities lawyers represent investors in FINRA arbitration and in court. We help clients recoup their losses. We also handle cases involving older investors. Please contact one of our elder financial fraud lawyers today if you or someone you love was the victim of broker fraud.

Ameriprise Financial Unit Ordered to Pay More Than $2 Million to Client’s Estate, The Wall Street Journal, January 20, 2016

BrokerCheck, FINRA