Ameriprise Financial Services Inc. has agreed to pay a $100,000 fine to settle charges by the Financial Industry Regulatory Authority that the firm failed to supervise closed-end fund sales.
 
Finra alleged that from January 2010 through April 2013, Ameriprise did not have adequate supervisory systems in place to prevent churning of newly issued closed-end funds.
 
The case stemmed from an earlier incident involving a former broker at the firm, Michael Halla.
 
Last year, Halla agreed to pay a $10,000 fine and $18,000 in disgorgement, plus serve a two-month suspension. Finra alleged that Halla engaged in short-term trading of new closed-end funds in 20 customer accounts during 2010 and 2011.
 
Halla neither admitted nor denied Finra’s allegations.
 
In the case against the firm, Finra claimed that Ameriprise compliance personnel twice flagged Halla’s trading but failed to follow up.
 
“Prior to April 2013, [Ameriprise] did not utilize any surveillance reports designed to highlight or detect patterns of short-term trading or switching” of closed-end funds, the settlement document says.
 
Finra said the firm ultimately identified the suspect trading, terminated Halla in 2012, and enhanced its system for supervising closed-end fund transactions.
 
The settlement was approved by Finra on Monday and just made available.
 
Ameriprise spokesperson Kathleen McClung declined to comment.