According to the self-governed regulatory agency, the Minneapolis-based firm and its clearing house, American Enterprise Investment Services, failed to adequately supervise wire transfer requests and the transmittal of customer funds to third party accounts.
Former Ameriprise broker Jennifer Guelinas, who was terminated from Ameriprise in 2010, allegedly converted $790,000 from two customers without authorization. The scheme, which was carried out over a four-year period from 2006 to 2010 was accomplished by forging client signatures on approximately 85 wire transfer requests, according to public documents with FINRA.
“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,” the executive vice president and chief of enforcement at FINRA, Brad Bennett, said in a statement. “Firms must have robust supervisory systems to monitor and protect the movement of customer funds.”
In one case, the regulatory agency alleged that Ameriprise processed and submitted at least three forged wire transfer requests to funds from a customer’s account to a bank account under Guelinas’ control without inquiries. In addition, at least one request had bounced back for “an apparent signature discrepancy,” but was still sent through, FINRA said.
“Respondent’s systems relied on a manual review of wire requests without benefit of exception reports that could help discern suspicious patterns of requests,” FINRA wrote in the Letter of Acceptance, Waiter and Consent. “Respondent’s systems also lacked adequate tracking or further investigation of rejected wire transfer requests and any potential issues relating to the requests.”
Following the investigation Ameriprise paid full restitution to the two customers and took remedial measures. According to the Corrective Action Statement, Ameriprise enhanced its controls in “numerous important ways,” began sending specific written confirmation to clients reflecting wire activity in 2009, began referring all signature discrepancies to a centralized fraud team in 2010, and in January 2012 “implemented an automated reporting process that monitors for potential issues or trends associated with third-party wire transmittals from brokerage accounts.”
“We are pleased to have resolved this matter from several years ago and have enhanced our related policies, procedures and technology,” a spokesperson for the firm said in an emailed statement.
Ameriprise signed the Letter of Acceptance, Waiver and Consent without admitting or denying the accounts.
In February 2011, Guelinas was barred from any affiliation with FINRA member firms and plead guilty to wire fraud in 2012 in the U.S. District Court in Hammond, Indiana.