The Securities and Exchange Commission charged Ameriprise Financial Services, Inc. with fraud today and accused the Minneapolis-based broker-dealer of receiving millions of dollars in secret payments as a condition of offering and selling certain REITs to its brokerage clients.
Ameriprise agreed to settle the charges without admitting wrongdoing and pay $17.3 million, the SEC said.
According to the SEC order: “Ameriprise received approximately $30.8 million in undisclosed compensation in connection with Ameriprise’s offer and sale to its brokerage customers of certain real estate investment trusts (‘REITs’) between 2000 and May 2004 … Ameriprise demanded this undisclosed compensation, which is referred to as ‘revenue sharing,’ in exchange for including the REITs on Ameriprise’s brokerage platform.”
Download SEC_Ameriprise_33-9051
Ameriprise also sold more than $100 million of unregistered shares of one REIT in violation of the registration provisions of the federal securities laws, the SEC said.
“Few things are more important to investors than getting unbiased advice from their financial advisers,” Robert Khuzami, Director of the SEC’s Division of Enforcement, said in a statement. “Ameriprise customers were not informed about the incentives its brokers had to sell these investments.”
The SEC said its investigation is continuing.
The Vernon Litigation Group law firm is currently investigating claims on behalf of investors surrounding misrepresentations about the safety and liquidity of unlisted REITs and the suitability of marketing these products to certain investors, including older, risk-averse investors. For more information, contact Vernon Litigation Group by phone at (239) 319-4434 or by e-mail at info@vernonhealy.com.