Ameriprise Financial Services Inc. has reached a $200,000 settlement with the state of Massachusetts, resolving accusations that several of its reps employed unfair sales practices when working with clients.
According to Attorney General Martha Coakley's office, six Ameriprise reps used deceptive sales practices between 2005 and 2008.
In documents summitted as part of the settlement, the state said the firm failed to adequately supervise these reps — some of whom had histories of disciplinary action or consumer complaints.
Ameriprise's lack of supervision allowed these reps to charge fees for financial plans that they never actually delivered to clients, the attorney general's office said The reps also failed, in some cases, to disclose the fees behind plans and investment products to clients, according to the documents.
Along with the settlement, the state also called upon Ameriprise to make restitution to the Massachusetts customers.
Ms. Coakley's office demanded that Ameriprise take reasonable steps to protect customers from deceptive practices, including requiring registered principals to take steps to prevent fraud and prohibit advisers from signing clients' names on applications — or from accepting signed, but otherwise blank, forms.
“We have returned money to clients where appropriate and we have taken steps to ensure issues like this do not arise again," said Ameriprise's spokesman, Chris Reese. "Specifically we have improved our processes, record keeping and oversight of
financial planning sales, and we have parted ways with the involved advisers.”
The reps identified by Ms. Coakley's office are John Paul Destefanis, Jac Allen Bentley, Leo James Ryan Jr., Seung Hoon Choi, Erik S. Poje and Hsiaolan Sharon Hsu. The state did not pursue charges against the reps individually.
Mr. Bentley resigned from Amerprise in 2007 and is now affiliated with Brookstone Securities Inc., while Mr. Destefanis was discharged from Ameriprise in 2008 and is now with Cantella & Co. Inc.
In the past, Mr. Bentley had faced consumer complaints on allegedly unsuitable sales of Class B shares and an accusation that a client never received a variable universal life insurance policy or full disclosure of surrender charges, according to Finra's BrokerCheck database.
Meanwhile, Mr. Destefanis was let go at Ameriprise for allegedly violating the firm's compliance practices, according to BrokerCheck.
Mr. Ryan is currently on a one-year suspension, following findings that he had signed customer names on transaction forms without their authorization or consent, according to Finra records. Mr. Ryan neither admitted nor denied the findings, but consented to Finra's sanctions. He is suspended until Dec. 14.
There were no Finra listings for the other three reps.
Calls to Mr. Destefanis and Mr. Bentley were not immediately returned.
