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SEC settles with Ameriprise over allegations company disadvantaged customers

By Mark Iandolo | Mar 5, 2018

WASHINGTON (Legal Newsline) — The Securities and Exchange Commission (SEC) announced Feb. 28 that Ameriprise Financial Services Inc. will pay $230,000 in penalties and consent to a cease-and-desist order and censure after allegations of disadvantaging certain requirement account customers.

According to the SEC, the defendants recommended to retail retirement account customers that they buy higher-fee mutual fund shares without determining whether they were eligible for less expensive mutual fund classes. Alleged conduct of this nature violates Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933.

“Ameriprise generated greater revenue for itself but lower returns for its retirement account customers by recommending higher-fee share classes,” said Anthony S. Kelly, co-chief of the SEC Enforcement Division’s asset management unit, in a statement. “As evidenced by our recently announced share class selection disclosure initiative, pursuing these types of actions remains a priority for the division as we seek to get money back in the hands of harmed investors.”

Handling the case for the SEC were Salvatore Massa, Steven J. Meiner and John Farinacci of the asset management unit. Jessica M. Weissman supervised the three employees during the case.

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