FINRA Finds Fault With Ameriprise and Advisor for Altered Documents
By Suleman Din
On Wall Street
Oct. 15, 2014
Excerpt:
An Ameriprise advisor has been fined and temporarily suspended by FINRA, and the brokerage was censured and fined as well after an investigation detailed how the advisor altered documents of a client he faced in arbitration hearings, and the firm knowingly kept quiet about the changes. …
FINRA arbitration experts said they could not recall an example of a case involving doctored files before an arbitration panel and an intentional effort to keep it from a complainant.
“Personally, I think this is as bad as it gets,” said Ronald J. Colombo, associate dean for academic affairs at the Hofstra University School of Law, and a regularly serving FINRA arbitrator.
Colombo added that the case was illustrative of the informality of FINRA arbitration hearings. “It’s pretty much a black box about what goes on. A lot of these matters are resolved through best efforts and informally among parties.
“The panel does not conduct its own investigation,” Colombo added. “It relies on parties to present cases. A panel does have an obligation to report to FINRA if there is reasonable suspicion of something wrong, but that’s a high threshold. It’s a volunteer panel, and it is going to rely heavily on the parties to lead them on the evidence.”
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