Sean Eric Mattson of South Lyon, Michigan was suspended for one month for failing to disclose his outside business activity of financial planning services to his employer, Ameriprise Financial Services, Inc. (Ameriprise or “the Firm”).
From March 2013 through December 2013, Mr. Mattson provided financial planning services to seven (7) Ameriprise customers and received direct compensation from the customers for his work. Mr. Mattson gained almost $7,000 in personal revenue from his independent financial services company.
Randall A. Samson (“Mr. Samson”), a financial advisor with Ameriprise Financial Services, Inc. (“Ameriprise”), was barred from association with any FINRA member after transferring funds out of a client’s account and converting the money to his own use.
Mr. Samson used his position as a financial advisor to complete a $10,000 distribution out of his client’s 401(k) subaccount to Mr. Samson’s own bank account. Mr. Samson made the withdrawal without the client’s knowledge or consent. The funds were wired to Mr. Samson’s bank account where he then used the money to fund payroll and other overhead expenses for his new personal business venture, Samson & Associates.
If you’re reading this article, there is a good chance you invested in or through an entity that is now in receivership, and you probably have a lot of questions! The purpose of this article is to give you a general overview of how receiverships work so you know what to expect. Every receivership is different, but every receivership goes through four overlapping stages: 1) stabilization; 2) investigation; 3) litigation; and 4) distribution.
These four stages all support the overarching goal of every receivership—the orderly winding down of a business in a manner that maximizes value for investors.
We will come back to these four stages in a minute, but first it is important to understand the background context that gives rise to a receivership.
Some investor claims are easy to see, such as when money is simply missing from an account or a financial advisor has been arrested for securities fraud. In other cases, a financial advisor has been negligent. The financial advisor did not commit fraud, but he did make mistakes that caused investment losses. These cases are more difficult for an investor to spot. Here are the three things we see in most of the investor claims we file against financial advisors for malpractice or negligence.
Financial advisors love to sell variable annuities. The reason is simple—commissions of up to 8%. If a financial advisor can sell you a $200,000 variable annuity, that means commissions of up to $16,000. Not bad for a day’s work!
Unfortunately, commissions are just about the only thing that is simple about variable annuities.
The one reason why variable annuities are almost always a bad idea is that they are too complicated for ordinary investors (and normal people in general) to understand. Seriously, have you ever tried to read a variable annuity policy? Here is just one example from an actual policy. Try to stay awake through this, because there is a lot more you urgently need to know about variable annuities:
If your financial advisor has caused investment losses, you may want to sue your financial advisor. For better or for worse, you may instead be forced out of court and into a FINRA arbitration. This post explains why securities litigation frequently ends up in FINRA arbitration, and what you can expect from the FINRA arbitration process.