Report: Ameriprise may let troubled brokerage fail
Posted by: Admin
March 31st, 2011 >> Uncategorized
Ameriprise Financial Inc. may let an independent brokerage fail instead of bailing it out tens of millions of dollars of legal claims, according to media reports.
The brokerage is Securities America in La Vista, Neb., which supports 1,800 self-employed brokers who do not use the Ameriprise name. But it is a subsidiary of Minneapolis-based Ameriprise.
Investors say they lost $400 million on securities bought through Securities America, and they have sued to get their money back. But a Dallas judge rejected a $21 million class-action settlement last week, and lawyers for the investors, Ameriprise and Securities America started mediating in Chicago this week.
Reuters reported that Securities America says it doesnt have the money to pay the claims, but the investors are betting that Ameriprise will make them whole.
But it quoted an unamed source saying that, Ameriprise is willing to walk away … It is a public company with shareholders, and Ameriprise has to look out for their interests. Click here to read the Reuters story.
Forbes, meanwhile, got a statement from Ameriprise: While Ameriprise Financial has no obligation to participate in Securities America’s settlement discussions, we have reached out to Securities America to determine if we can help the parties find a reasonable resolution for all constituents. You can read the Forbes story here.
estych@bizjournals.com