FINRA fines Ameriprise $750,000
By National Underwriter
By Maria Wood
FINRA announced today that it has fined Ameriprise Financial Services Inc. and its affiliated clearing firm, American Enterprise Investment Services Inc., (AEIS) $750,000 for failing to properly supervise and monitor wire transfer requests and the transmission of customer funds to third-party accounts.
The fine relates to a prior enforcement action FINRA levied against a former Ameriprise registered representative, Jennifer Guelinas. Guelinas, according to FINRA, took approximately $790,000 from two senior citizen customers over a four-year period by forging their signatures on wire transfer requests and then putting the funds in bank accounts she controlled. Ameriprise has paid full restitution to the customers following an investigation, FINRA noted. Guelinas was barred by the agency in 2011.
According to a statement from FINRA, Ameriprise and AEIS:
- Failed to establish, maintain and enforce a supervisory system to review and monitor the transfer of funds from customer accounts to third-party accounts.
- Did not have policies or procedures in place to detect or prevent multiple transmittals of funds going to third-party accounts. The firms instead relied on a manual review of wire requests that lacked exception reports that might have uncovered suspicious patterns.
- Further failed to adequately track or further investigate wire transfer requests that had been rejected.
Furthermore, there were at least three other occasions when Ameriprise initially rejected Guelinas’ forged wire transfer requests, including one for questions over a signature, which the rep then resubmitted on either the same day or the next day. Guelinas also forged and submitted a wire transfer request after Ameriprise had begun to investigate her misconduct. In all of these instances, Ameriprise disbursed the customer funds as Guelinas directed.
After the firm had terminated Guelinas, she submitted another forged wire transfer request. Ameriprise again disbursed the customer’s funds to a bank account Guelinas controlled. Yet in that instance, the firm realized its error in time and was able to prevent Guelinas from accessing those funds, according to the FINRA statement.
“Ameriprise and its affiliated clearing firm missed numerous supervisory red flags, including the fact that two of the wire transfers went to accounts in Guelinas’ name. Firms must have robust supervisory systems to monitor and protect the movement of customer funds,” said Brad Bennett, FINRA’s executive vice president and chief of enforcement, in a statement.
“We are pleased to have resolved this matter from several years ago and have enhanced our related policies, procedures and technology,” said a spokesperson for Ameriprise in an email to Lifehealthpro.com.
Ameriprise and AEIS neither admitted nor denied the charges, but consented to the entry of FINRA’s findings, noted the FINRA report. The investigation was conducted by FINRA’s departments of enforcement and member regulation.
Originally published on LifeHealthPro.com