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Ameriprise Financial Services Inc. reached a settlement with the SEC in a case alleging that the Minnesota-based firm recommended and sold higher-fee mutual shares to retirement account customers.
The Securities and Exchange Commission accused Ameriprise of putting retirement account customers at a disadvantage by failing to let them know of their eligibility for less-expensive mutual fund share classes. Approximately 1,791 customer accounts paid $1.78 million in excessive fees as a result of Ameriprise’s practices, the SEC said Feb. 28.
Ameriprise voluntarily paid full remediation to clients, with interest, a company spokesperson told Bloomberg Law March 1 via email.
Ameriprise didn’t admit or deny the SEC findings, but it consented to a cease-and-desist order, a censure, and a penalty of $230,000, the SEC said. The financial firm cooperated with the agency and voluntarily identified the affected accounts and converted eligible customers to the mutual fund share class with the lowest expenses for which they were eligible, at no cost.
Ameriprise manages some $800 billion in assets for more than 2 million individual, institutional, and small-business clients, according to Bloomberg data.
In 2011, Ameriprise was sued by its own employees for allegedly breaching its fiduciary duties by investing its 401(k) plan assets in underperforming mutual funds managed by a subsidiary. In 2015, the financial firm agreed to pay $27.5 million to settle those claims.
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