Ameriprise Financial Problems
Ameriprise Financial, which is based in Minnesota, was founded in 1894. It was acquired and then spun off by American Express. The company's financial advisers got into trouble for pushing the firm's underperforming funds and other violations. The Ameriprise website also developed some security flaws that put the financial information of customers in jeopardy. Despite those problems, Ameriprise is firmly in the Fortune 500 and has been named as a good place to work.
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History
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What is now Ameriprise Financial began in 1894 as Investors Syndicate. The company, headquartered in Minneapolis, later changed its name to Investors Diversified Services (IDS). American Express bought IDS in 1984. In 2005 American Express spun off the company and called it Ameriprise Financial Inc. The company is now one of the largest financial advisory firms in the U.S.
Problems arise
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Ameriprise Financial's advisers get commissions when they sell mutual funds and other products. In the early 2000s, Ameriprise was criticized for selling certain mutual funds based on the brokerage commissions it received rather than the quality of the funds. The company was also accused of pushing underperforming in-house financial products, allowing clients to rapidly trade in-house funds in an attempt to time the market, and inappropriate sales of college-savings plans.
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Settlements
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Ameriprise in 2005 agreed to pay $57.3 million in fines from state and federal regulators for the mutual-fund sales practices. The fines included payments to the U.S. Securities and Exchange Commission and National Association of Securities Dealers, as well as regulators in New Hampshire and Minnesota. Ameriprise neither admitted nor denied the allegations when it settled the cases. Ameriprise said at the time of settlement that it had "proactively enhanced our compliance policies" to address the issues.
Security flaws
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More problems arose in 2009. Security bugs were discovered on the Ameriprise website, allowing criminals to put harmful content on the company's site and steal some users' information. The flaws allowed phishers to send Ameriprise customers links to the Web site that looked legitimate. In that way criminals could gain access to customer accounts. Ameriprise said it had addressed the concerns and flaws.
Better times
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Ameriprise has since been able to put some of its problems behind itself. The company has aggressively recruited brokers from other firms that struggled during the financial crisis of 2008. In 2006 BusinessWeek called Ameriprise the 19th-best place to launch a career. In 2008, the company ranked No. 296 on the Fortune 500.
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