SEC Charges RiverSource Distributors With Improper Switching of Variable Annuities

Posted on June 8th, 2022 at 11:23 AM
SEC Charges RiverSource Distributors With Improper Switching of Variable Annuities

From the Desk of Jim Eccleston at Eccleston Law:

The Securities and Exchange Commission (SEC) has agreed to a settlement with RiverSource Distributors Inc. for improper switching or replacing of variable annuities. According to the SEC, RiverSource sold variable annuities to retail clients through an affiliated investment advisory firm, Ameriprise Financial Services. 

This action is the SEC’s first enforcement proceeding under Section 11 of the Investment Company Act of 1940. Under Section 11 of the Investment Company Act, any underwriter is prohibited from making an offer to exchange the securities of registered unit investment trusts unless the terms of the offer have received SEC approval. 

Certain RiverSource employees designed and utilized a sales practice that caused exchange offers to be presented to holders of variable annuities to switch from one variable annuity to another, which ultimately generated increased sales commissions for RiverSource employees, according to the SEC. The SEC additionally alleged that the exchange transactions occurred frequently from 2016 until 2018 when RiverSource’s compliance department condemned the sales practice. RiverSource consented to the SEC’s allegations without admitting or denying any investigatory findings and will pay a $5 million civil penalty. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

 
 

Tags: eccleston law, sec, variable annuities

Return to Archive

TESTIMONIALS

Previous
Next

You guys are good!

Mike L.

LATEST NEWS AND ARTICLES

May 2, 2024
FINRA Bars Former E-Trade Broker for Refusal to Cooperate in Investigation

Matthew J. Chimento, a former broker at E-Trade Securities in Alpharetta, Georgia, has been barred by FINRA for failing to provide information and documents related to allegations of unauthorized fund transfers from a client's account.

May 1, 2024
FINRA Arbitration Awards Wells Fargo Over $3 Million in Dispute with Ohio RIA Founders

A recent FINRA arbitration decision has ordered a Cincinnati-based registered investment advisor firm and two of its founders to pay Wells Fargo more than $3 million in combined damages.

May 1, 2024
Attorney Eccleston Receives AVVO Top Rated Lawyer Award 2024

 James Eccleston has been officially recognized as a Top Rated Lawyer by Martindale-AVVO.