Like a ghost, bad advisors can haunt a firm long after alleged misdeeds are uncovered and their corporeal selves no longer inhabit the office.
An Ameriprise advisor who was fired from the firm in November 2010 and barred by FINRA in February 2011 for misusing client accounts was at the heart of Monday’s $750,000 fine for the firm’s supervision failures.
Although Ameriprise paid two clients restitution for the $790,000 that former rep Jennifer Guelinas allegedly stole using forged signatures on wire transfer requests, FINRA slapped Ameriprise and its clearing firm with a $750,000 fine on Monday for failing to have and utilize proper safeguards.
"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,” says FINRA’s chief of enforcement Brad Bennett. “Firms must have robust supervisory systems to monitor and protect the movement of customer funds."
FINRA claimed that Ameriprise should have been clued into the alleged scam by noticing Guelinas submitted three requests to transfer money from customer accounts to her own. Those transfer requests and dispersals continued even after the firm opened an investigation. The firm even approved her transfer requests after she was fired, though Amerirprise caught the mistake before she was able to access the money.
In fining Ameriprise, FINRA claimed that the firm did not have proper supervision standards in place and failed to adequately track or investigate wire transfer requests. Further, the firm relied on manual reviews of requests without utilizing exception reports that could have helped to uncover suspicious patterns.
Ameriprise “neither admitted nor denied the charges, but consented to the entry of FINRA's findings,” the regulator said.
“We are pleased to have resolved this matter from several years ago and have enhanced our related policies, procedures and technology,” said Chris Reese, director of Ameriprise’s public communications.