NASD fines Ameriprise Financial over sales of college savings plan | VailDaily.com
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NASD fines Ameriprise Financial over sales of college savings plan

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NEW YORK – The National Association of Securities Dealers on Wednesday ordered Ameriprise Financial Services Inc. to pay a $500,000 fine for failing to adequately supervise the sales of 529 college savings plans.The NASD, one of the brokerage industry’s self-regulatory organizations, said Ameriprise, formerly American Express Financial Advisors, will also pay about $750,000 to compensate more than 500 customer accounts affected by the supervisory failures.The NASD said that from May 2001 to October 2003, Ameriprise sold the Wisconsin state plan to all customers, even though customers in New Mexico, South Carolina, Illinois, Colorado and West Virginia could have received state income tax deductions for using their home state plans.Ameriprise neither admitted nor denied the allegations, but consented to the NASD’s findings, which mark the regulator’s first actions stemming from a fact-finding sweep into the savings plans.The NASD noted that the violations occurred when Minneapolis-based Ameriprise was still a unit of American Express Co. The spinoff of Ameriprise became official on Sept. 30.Ameriprise spokesman David Kanihan said, “We are pleased to resolve this matter and we are confident that our policies and procedures in this area are aligned with our clients interests.”Section 529 savings plans offer tax breaks for parents and other looking to counteract higher education costs. The plans are regulated by the Municipal Securities Rulemaking Board, whose rules are enforced by the NASD.The NASD said its investigation showed that from May 2001 to the end of 2004, Ameriprise sold more than $1.1 billion of 529 plans, while the company’s procedures didn’t comply with suitability obligations in the sale of the plans.Vail, Colorado


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