Investment fraud is a serious concern that can lead to significant financial losses for investors. Recently, allegations have surfaced against financial advisor Adam Anderson and his company, Ameriprise Financial Services, LLC. The Financial Industry Regulatory Authority (FINRA) has taken note of these allegations and has taken action against Anderson.
The Allegation and FINRA Rule
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On September 25, 2023, without admitting or denying the findings, Anderson consented to the sanctions and to the entry of findings that he failed to provide prior written notice of an Outside Business Activity (OBA) to his member firm, Ameriprise Financial Services, LLC. According to the findings, Anderson engaged in the OBA by assisting in the creation of a reinsurance company and entering into a contract as the president of that company. This company provided reinsurance coverage on risk management insurance policies that Anderson’s separate limited liability company purchased from an insurance company. The insurance company paid Anderson’s reinsurance company $197,500 in premiums. This arrangement led to tax savings for Anderson.
Furthermore, Anderson falsely stated on his firm annual attestation that he had disclosed all current OBAs. When Anderson later provided written notice to the firm of his OBA, it evaluated and did not approve his OBA. This violation is against FINRA Rule 3270, which requires brokers to provide prior written notice of any OBA to their member firms.
Why it Matters for Investors
This situation is significant for investors because it raises concerns about conflict of interest and potential fraud. When a financial advisor engages in undisclosed OBAs, it can lead to situations where the advisor’s personal interests conflict with those of the clients. This can lead to biased advice or even financial losses for the clients.
Haselkorn & Thibaut, a national investment fraud law firm, is currently investigating this matter. They offer free consultations to clients who may have been affected by this situation.
Red Flags for Financial Advisor Malpractice
- Undisclosed outside business activities
- False statements on firm attestations
- Conflict of interest
Recovering Losses through FINRA Arbitration
Investors who have suffered financial losses due to advisor malpractice can recover their losses through FINRA Arbitration. This process involves a neutral third party who reviews the case and makes a decision. Haselkorn & Thibaut has over 50 years of experience in this area and a 98% success rate. They operate on a “No Recovery, No Fee” policy and can be reached at their toll-free number, 1-800-856-3352.
Investors should always be vigilant for red flags of advisor malpractice. By understanding the seriousness of these allegations and the steps they can take to recover their losses, investors can protect their financial interests.
