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U.S. Securities and Exchange Commission

American Express Financial Advisors Inc.

Latest Action:† On September 25, 2008, the SEC announced a distribution of nearly $32 million to current and former customers of Ameriprise Financial Services, Inc. (formerly American Express Financial Advisors Inc.) who were harmed by the firmís failure to adequately disclose revenue sharing payments from a select group of mutual fund companies. Investors can obtain additional information about the distribution on Ameripriseís website

Background: On December 1, 2005, the SEC instituted settled administrative and cease-and-desist proceedings against American Express Financial Advisors Inc. (now known as Ameriprise Financial Services, Inc.). The SEC issued an Order finding that AEFA violated the federal securities laws by failing to disclose its receipt of revenue sharing payments for distribution of shares of mutual funds and Section 529 college savings plans from certain mutual fund families that participated in its Preferred Provider and Select Group programs. As part of the settlement, AEFA has agreed to pay a total of $30 million in disgorgement and civil penalties to be distributed to benefit customers who purchased mutual funds from the Preferred Provider and Select Group programs between January 1, 2001, and August 31, 2004. For more information on the SEC's action, you can read In the Matter of American Express Financial Advisors Inc. (now known as Ameriprise Financial Services, Inc.), Rel. No. 33-8637 (Dec. 1, 2005).

Under the terms of the SEC's Order, AEFA, through an independent distribution consultant, must submit a plan to the SEC for the distribution of the total amount of the $30 million to investors. On February 15, 2008, the SEC published a Notice of Proposed Distribution Plan and Opportunity for Comment, which specifies how copies of the proposed Distribution Plan can be obtained, and describes the process by which persons may comment on the Plan. Those who wish to provide their comments on the proposed Distribution Plan must submit them, in writing, no later than March 17, 2008.

 

http://www.sec.gov/divisions/enforce/claims/aefa.htm


Modified: 09/26/2008