Securities America was founded in 1984 promoting itself as a large network of independent insurance licensed agents to market and sell securities and investment-related products. In 1998, Securities America was acquired by American Express. In October 2005, Securities America was spun-off as a wholly-owned subsidiary of Ameriprise Financial, the successor broker dealer of American Express. After the spin-off, Securities America continued to operate independently, headquartered in Omaha, Nebraska with over 1,700 independent financial advisors across the country.
In November 2011, Ameriprise Financial, the parent company, sold Securities America to Ladenburg Thalmann Financial Services for $150 million in cash and other potential payments.Regulatory Violations
Securities America has been the subject of many regulatory investigations, some of which resulted in disciplinary actions by regulators.Securities America Settles Massive Securities Fraud Case
In 2011, Silver Law Group, as a member of a legal team, represented a large group of investors against many brokerage firms, including Securities America (a subsidiary of Ameriprise Financial) concerning a massive Ponzi scheme related to Medical Capital Notes and Provident Royalty limited partner (LP) interests, sold to investors through the use of private placement memorandums (PPM). According to Ameriprise Financial’s SEC 8-K filing, the parent company paid $150 million to settle arbitration and lawsuit claims against its independent broker-dealer subsidiary, Securities America Inc., over the sale of promissory notes from Medical Capital Holdings and the sale of LP interests in Provident Royalties LLC. The two investments were determined by regulators to be Ponzi schemes. Medical Capital purported to buy accounts receivable medical bills and make loans to health care providers. Provident Royalties claimed to develop oil and gas properties and sold stock. Securities America, a subsidiary of Ameriprise, sold $697 million worth of Medical Capital notes and $47 million of Provident securities.Broker With False Identity Runs Ponzi Scheme
In 2003, a NASD arbitration panel awarded $5.4 million in compensatory damages, punitive damages and attorney’s fees to a group of investors defrauded by a financiual advisor who operated under a false identity after being licensed in the State of Florida. The arbitration panel determined that a Ponzi scheme defrauded investors run by David Wolas, aka. Allen Hengst, while he held his securities license with First Union Securities Financial Network and later with Securities America. Securities America was fined $841,661 and found “liable for negligence with respect to implementation of hiring and supervision practices” related to David Wolas, who was a Federal criminal fugitive at the time of the hearing.Securities America Broker Defrauds Retired Exxon Employees
In May 2006, a NASD arbitration panel awarded $13.8 million to 32 retired Exxon employees in compensatory damages; plus punitive damages, and attorney’s fees for securities fraud related to early retirement seminars. Securities America financial advisor, David McFadden, conducted retirement seminars targeted to Exxon employees close to retirement using projected investment returns of between 11%-14% to support his recommended rollover of their retirement plan balances. The investment projections used violated securities industry rules and regulations for failure to disclose the material risks associated with the investment projections. McFadden’s projections and misleading information failed to disclose the risk of running out of retirement funds based on the projected withdrawal rates used justify the early retirement scenario.Retired American Airline Pilots Targeted by Securities America Financial Advisor
December 2006, a NASD arbitration panel awarded $9.3 million for a claim filed by three retired American Airlines pilots against Securities America and financial advisor, Robert Gormly located in Texas. The arbitration award included $3.84 million in compensatory damages, $3.0 million in punitive damages and $2.41 million in attorney’s fees for excessive trading in leveraged Rydex mutual funds. According to the arbitration award, the alleged causes of action were related to damages from day trading in index-based mutual funds and the high fees associated with the recommended investment strategy.Improper Sale of Non-Traded REITs to Massachusetts Residents
In September 2013, Securities America was ordered to pay $7.7 million in fines and restitution by Massachusetts attorney general for the improper sale of non-traded real estate investment trusts (REITs) to its residents. In many of the transactions reviewed by state regulators, Securities America failed to properly supervise the transaction in customer accounts according to standards established by the state regulations and the brokerage firm’s own compliance rules. Securities America failed to comply with certain income, net worth and securities concentration rules and regulations.Silver Law Group
Silver Law Group is a nationally recognized securities and investment fraud law firm with Martindale-Hubbell® Peer Review Ratings™ “AV” rated lawyers that handle all securities arbitration matters on a contingency fee basis. The Law Firm, at no cost to investors will review account activity and account statements to determine whether there was any misconduct, whether there are damages and the legal causes of action. We investigate all sales practice violations, while taking into consideration the investor’s age, investment background, and the relationship between the investor and the brokerage firm and its financial advisor. According to securities industry rules and regulations, unsuitable investment advice, securities concentration, fraudulent misrepresentations and omissions of material facts, breach of fiduciary duty, conflicts of interest, variable annuity switching are among the causes of action that may be available to investors in claims for damages against brokerage firms and their financial advisors in a securities arbitration claim filed with the Financial Industry Regulatory Authority (FINRA). We represent investors in FINRA arbitration claims on a contingency fee basis.
To learn more call us at (954) 755-4799 or Toll Free at (800) 975-4345