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Ameriprise Financial has revealed that it has set aside $50 million as an accrual to resolve an investigation by the Securities and Exchange Commission (SEC) concerning the use of off-channel communications by its employees for business purposes. According to the firm's latest annual report published on February 22, it has reached a preliminary agreement with SEC staff regarding the matter. This move places Ameriprise among a growing number of banks, broker-dealers, and investment advisers ensnared in an enforcement sweep, which has already led to nearly $3 billion in fines against other financial services companies.
Ameriprise disclosed that it recorded the accrual in 2023, following its response to SEC requests for documents and information concerning the preservation of certain business-related communications sent via electronic messaging platforms that were not approved by the company. The SEC's stance on mitigating penalties for violations related to off-channel communications emphasizes the importance of voluntary self-disclosure and remediation by financial institutions.
"The firm said it recorded the accrual in 2023, after it 'responded to SEC document and information requests regarding the preservation of certain business-related communications sent on electronic messaging platforms that have not been approved by the company,'" the firm stated in its annual report.
"The SEC has made clear the path for financial firms to earn smaller penalties for off-channel communications violations is to voluntary self-disclose and remediate," the report added.
By fLEXI tEAM