U.S. regulator fines two Ameriprise units $750,000
March 4 (Reuters) - Two units of Ameriprise Financial Inc have agreed to pay a $750,000 civil fine for not having adequate systems to monitor wire transfers in a case stemming from a broker who secreted money from clients, Wall Street's industry-funded regulator announced on Monday.
The Financial Industry Regulatory Authority said Ameriprise Financial Services and its affiliated clearing firm, American Enterprise Investment Services Inc, failed to detect a former broker, Jennifer Guelinas, based in Schererville, Indiana, who moved roughly $790,000 from two customers between 2006 and 2010 into outside accounts she controlled.
Guelinas pleaded guilty to a federal wire fraud charge last May, according to court documents. She is awaiting sentencing.
Her lawyer declined to comment.
FINRA barred her from the securities industry in 2011, according to regulatory filings.
"We are pleased to have resolved this matter from several years ago and have enhanced our related policies, procedures and technology," an Ameriprise spokesman said in a statement.
The companies fully reimbursed the two customers and terminated the broker after discovering the problem in 2010, according to a FINRA settlement agreement. The two Ameriprise units neither admitted nor denied FINRA's findings.
The case illustrates how transfers, undetected over time, can add up to significant sums. Disbursements from the customers' accounts ranged from $1,000 to $10,000 or more, according to the settlement. Guelinas allegedly forged her clients' signatures on 85 wire requests, according to FINRA.
Ameriprise and its clearing firm missed numerous "red flags" in not detecting the transfers for nearly four years, according to the settlement. Guelinas allegedly submitted several more forged wire requests after the firms discovered her conduct and disbursed customer funds to accounts she controlled, FINRA said.
The firms also allegedly processed a false request Guelinas made after her termination, but then realized their mistake and returned the funds to the customer's account, FINRA said.