FINRA fined Ameriprise Financial Services, Inc. $850,000 for failing to supervise and detect former broker Justin Matthew Weseloh's conversion of funds from multiple customer brokerage accounts, and for violating additional firm policy. FINRA went on to say that Ameriprise failed to detect or investigate the misconduct over a two-year period, when it was discovered by happenstance after a coworker saw something unusual in an office trash can.
In the decision to censure and fine Ameriprise Financial (AMP) $850,000, FINRA Chief of Enforcement Brad Bennett wrote, "Ameriprise failed to exercise reasonable diligence in supervising the transmittal of customer funds to third-party accounts...[Firms] will be held responsible when their representatives use their insider status to prey upon customers."
According to the investigation, then-Ameriprise representative Weseloh served as a sales assistant and office manager at an Ameriprise branch from 2011 through 2013, during which time he took more than $370,000 from five Ameriprise customers, including several family members.
The report states that Weseloh (CRD #5321024) converted the funds by submitting wire request forms to transfer funds from the customers' brokerage accounts into the business bank account of The Partners Group, which was the name of the Independence, Ohio branch office in which he worked. Once the transfers were complete, Weseloh purportedly took funds or caused their conversion from The Partners Group's account in order to pay himself additional commissions, salary, and other "inflated" figures to which he was not entitled.
Weseloh's BrokerCheck report indicates that Ameriprise permitted him to resign in September 2013 while under suspension and investigation for misappropriation of client funds.
A September 2013 advertisement in The Brecksville Magazine for The Partners Group categorized the branch as an "Ameriprise Private Wealth Advisory Practice," and stated that Weseloh was a Partner, as opposed to a mere office manager. Furthermore, the ad flaunted The Partners Group's independently-owned status, writing that this freedom "allows for The Partners Group to provide a wide platform of services and tools to meet the needs of its clients."
Whereas the AWC barring Weseloh from the securities industry specifically referenced Ameriprise policy prohibiting Weseloh from advising clients and receiving client transaction-based compensation, including commission payments, the magazine ad quoted Weseloh as saying, "We start the majority of our relationships in an advice-driven capacity...provide council [sic] and proceed from there," which conflicts with the aforementioned Ameriprise policy.
Furthermore, the AWC uncovered $84,000 that had been wrongfully taken from The Partners Group, including $63,000 in prohibited commission payments to Weseloh.
In the Ameriprise action, FINRA wrote that the firm failed to detect and to adequately investigate a series of red flags, in part, because the firm failed to establish and enforce adequate supervisory systems.
FINRA implicated Weseloh as the sole member of The Partners Group who engaged in the misappropriation and conversion misconduct, while Weseloh himself consented to the findings while neither confirming nor denying them.
In fact, FINRA wrote that Weseloh's misconduct came to light only because another employee at The Partners Group found evidence in a trash can that Weseloh had been practicing the signature of one family member & customer from whom he was scheming to misappropriate or convert funds.
If you have invested with former Ameriprise Financial representative and The Partners Group office manager & Partner Justin Matthew Weseloh, or with any other broker or financial adviser who has nefariously used his or her insider position to misappropriate, convert, defraud, or otherwise deplete or damage your funds or similar financial interests and investments, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.