The Financial Industry Regulatory Authority (FINRA) recently barred Ameriprise Financial Services (Ameriprise) broker Jeffrey Davis (Davis) concerning allegations that the broker committed securities fraud by converting client funds. FINRA alleged that from May 2012, through June 2013, Davis converted $116,976 from five Ameriprise customers for his personal use and benefit. According to FINRA, Davis initiated 71 unauthorized electronic Automated Clearing House (ACH) payments from the customers’ brokerage accounts to personal credit card accounts held in Davis’ name. FINRA found that these transfers converted customer funds and violated FINRA Rules 2150 and 2010.
Davis entered the securities industry in June 1998. Davis became associated with Ameriprise in September 2000 and remained with the firm until he was terminated on July 19, 2013. In a Form U5 Uniform Termination Notice dated July 24, 2013, Ameriprise reported that Davis was terminated for misappropriating customer funds to ‘pay personal credit cards.
FINRA Rule 2150(a) prohibits members or person associated with a member from making improper use of a customer’s funds. Improper use of customer funds constitutes conversion of the client’s funds when there is an intentional and unauthorized taking of or exercise of ownership by one who neither owns the property nor is entitled to possess it.
In addition, FINRA Rule 2010 requires members to conduct their business in such a way as to observe high standards of commercial honor and just and equitable principles of trade. FINRA found that Davis converted $116,976 from the Ameriprise brokerage accounts customers for his personal use. Specifically, Davis was alleged to have effected 71 unauthorized electronic ACH payments totaling $116,976 from the brokerage accounts of customers and directed those funds to three of his personal credit card accounts. FINRA found none of the customers permitted Davis to transfer or use their funds for any purpose.
The attorneys at Gana LLP are experienced in representing investors to recover their financial losses concerning in cases of securities fraud, unauthorized trading, and conversion of funds. Our consultations are free of charge and the firm is only compensated if you recover.