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NASD Fines Ameriprise $500,000 Over 529 Sales


The NASD has fined Ameriprise Financial $500,000 for failure to properly supervise the sale of 529 college savings plans. NASD found that Ameriprise advisers failed to tell clients about the tax deductions they could have claimed by investing in 529s in their home state, and so, it has also ordered it to pay another $750,000 to compensate investors for the savings they would have realized.

NASD found that between May 2001 and October 2003, Ameriprise advised all of its customers to invest in the 529 plan of Wisconsin, which was the only 529 plan that Ameriprise carried and sold in that time period. About $200 million, or 32%, of these sales were to customers in five states that offer tax deductions: Colorado, Illinois, New Mexico, South Carolina and West Virginia. Ameriprise neither confirmed nor denied the wrongdoing.

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