Ameriprise Smacked With SEC Share-Class Violation Fine

Ameriprise failed to disclose that it would receive greater compensation from the purchases and that the purchases would negatively impact the overall return on the customers' investments, the SEC said.

"Ameriprise generated greater revenue for itself but lower returns for its retirement account customers by recommending higher-fee share classes," said Anthony Kelly, co-chief of the SEC Enforcement Division's Asset Management Unit.

"Ameriprise voluntarily paid full remediation to clients, with interest," the firm said in a statement. "It's important to note that this is a long-standing industry topic and numerous firms have settled with the SEC and FINRA on similar matters."

The SEC continued:

"As evidenced by our recently announced Share Class Selection Disclosure Initiative, pursuing these types of actions remains a priority for the Division as we seek to get money back in the hands of harmed investors."

Steven Peikin, co-director of the SEC's Enforcement Division, said on Feb. 23 at the SEC Speaks event in Washington that investment advisors putting their clients into higher fee share classes when lower cost ones are available "is a widespread problem."

Peikin, in referencing the division's newly launched Share Class Selection Disclosure Initiative, said the "ultimate goal" of the program is to try to "return money" to as many investors

The SEC's order instituting a settled administrative and cease-and-desist proceeding finds that Ameriprise violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933.