As reported by Marcy Gordon of the Associated Press, Ameriprise Financial Services Inc. has 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. Real estate investment trusts, known as REITs, are entities that invest in different kinds of real estate or real estate related assets, including shopping centers, office buildings, hotels, and mortgages secured by real estate. There are basically three types of REITS:
Equity REITS, the most common type of REIT, invest in or own real estate and make money for investors from the rents they collect;
Mortgage REITS lend money to owners and developers or invest in financial instruments secured by mortgages on real estate; and
Hybrid REITS are a combination of equity and mortgage REITS.
The SEC alleged in its complaint against Ameriprise 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 Ameriprise sold more than $100 million of shares of one REIT that weren’t registered with the agency, a violation of securities laws.
If you are concerned about investments you made with Ameriprise Financial Services Inc. and would like to speak to a securities attorney, please call The White Law Group at 312/238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.