SEC fines RiverSource Distributors Inc. $5 Million for Improper Variable Annuity Exchanges
According to The Securities and Exchange Commission this week, the regulator has reportedly fined RiverSource Distributors Inc., a subsidiary of Ameriprise Financial Services LLC, $5 million for allegedly improperly switching Ameriprise customers’ variable annuities in order to generate commissions.
RiverSource employees allegedly developed and implemented targeted sales practices between 2016 and 2018 to induce Ameriprise Financial Services (AFS) reps to zero in on variable annuities customers for contract switches, according to the SEC.
RiverSource employees reportedly implemented in-person and virtual meetings with Ameriprise registered representatives in its efforts to convince Ameriprise customers to switch their variable annuities. Some RiverSource employees allegedly even color-coded customer lists to highlight exchange opportunities and promoted the commissions that Ameriprise reps could earn, according to the regulator.
As a result, variable annuity exchanges increased from $671 million in 2015 to $768 million in 2016, $1,006,000 in 2017 and $1,049,000 in 2018.
In March 2018, RiverSource’s compliance department apparently attempted to put a halt to the practices by sending letters of reprimand and warning to its supervised individuals, and implemented a new training program, according to the SEC.
This led to RiverSource’s variable annuity exchanges decreasing to $838 million in 2019, according to the regulator.
The firm reportedly agreed to a cease-and-desist order, a censure and to pay a civil money penalty of $5 million to settle the SEC charges.
To learn more about the practice of variable annuity switching, please see: Variable Annuities Investigation, Variable Annuity Switching – Securities Fraud Lawyer
Potential Lawsuits to Recover Financial Losses
Overselling variable annuities or variable annuity switching can be a problem and is not in the best interest of the investor. If you have suffered losses due to variable annuities switching, the securities attorneys at The White Law Group may be able to assist you in the recovery of your investment losses.
For a free consultation with a securities attorney, please call the White Law Group at (888) 637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information, please visit our website, www.whitesecuritieslaw.com.
Tags: Ameriprise Financial lawsuit, RiverSource, securities fraud attorneys, VA exchanges, VA sales, variable annuity switching Last modified: November 29, 2022