Chicago-based Stoltmann Law Offices represents investors who’ve suffered losses from dealing with unscrupulous investment brokers. On April 28, 2020, the Financial Industry Regulatory Authority’s (FINRA) Department of Enforcement filed a complaint against an ex-Ameriprise representative, alleging he converted more than $42,000 of an elderly client’s funds for his own use. Sean Michael Refsnider, of Haddon Heights, New Jersey, was a representative at Ameriprise from 2012 until Aug. 20, 2019. The company stated he was fired after it concluded that his client’s funds were “misappropriated.” FINRA is the chief U.S. regulator of broker dealers.
According to the FINRA complaint, Refsnider allegedly “procured a check from `Customer A’ in the amount of $20,000 and then used the funds to pay his mortgage and other personal expenses.” Refsnider allegedly also had used a debit card linked to the client’s account to make purchases totaling about $17,317, in addition to $4,300 in cash withdrawals, the complaint said. Ameriprise said in a statement that it “quickly detected and stopped the activity, ensured the client was fully reimbursed, terminated the advisor and notified the proper authorities.”
In the past, Ameriprise has been cited by regulators for failure to protect customer assets. The U.S. Securities and Exchange Commission (SEC) fined Ameriprise $4.5 million in 2018 to settle charges “that it failed to safeguard retail investor assets from theft by its representatives.” According to the SEC’s order, 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 also found that Ameriprise, a 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.” The five Ameriprise representatives were based in Minnesota, Ohio, and Virginia, and three previously pled guilty to criminal charges. Each of the representatives was terminated by Ameriprise for misappropriating client funds and barred from selling securities by FINRA.
Ameriprise Financial offers annuities, asset management, financial advice and wealth management services. It has 14,000 employees and is based in Minneapolis. The company states it has a “hybrid supervisory system” for its sales network of about 9,700 brokers, approximately 7,700 of whom are independent contractors, according to the SEC’s cease-and-desist order. In 2011, a branch manager for Ameriprise claimed he was fired after he alerted his superiors of his concerns on broker oversight, reports Investment News. He sued Ameriprise, alleging “that his repeated complaints to management about fraud, forgery and other practices which violated SEC rules and regulations led to the retaliatory termination of his employment.”
“Independent broker-dealers selling financial products and services through a large force of affiliated brokers have structural challenges in policing their networks,” according to Advisorhub.com. LPL Financial, for example, the largest independent broker-dealer, has paid more than $75 million in state and federal fines and restitution since 2014.
The Stoltmann law offices have represented investors in claims against Ameriprise. If you invested with a broker and lost money as a result, you may have a claim to pursue through FINRA Arbitration. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm which means we do not get paid until you do!