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by Bill Singer

Ameriprise Gets Nasty Surprise Over Sale Of Financial Planning Practice

August 9, 2012

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in April 2011, Claimant King asserted fraud; negligent misrepresentation; negligence; breach of oral contract; unjust enrichment; interlocutory injunction and constructive trust; and promissory estoppel. The causes of action relate to the negotiations attendant to the sale and transfer of Claimant's financial planning practice to a representative registered with Respondent Ameriprise Financial Services.  Claimant King sought not less than the $452,887.00 purchase price of his practice plus interest; punitive damages; costs, and fees. Also, Claimant sought the  issuance of a preliminary injunction and imposition of a constructive trust on the profits generated by Claimant's former practice during the pendency of the litigation. In the Matter of the FINRA Arbitration Between Russell M. King, Claimant, v. Ameriprise Financial Services, Inc., Respondent (FINRA Arbitration 11-01675, August 6, 2012).


Respondent Ameriprise generally denied the allegations and asserted various affirmative defenses.

The FINRA Arbitration Panel found Respondent Ameriprise liable for and ordered it to pay to Claimant $226,443.50 in compensatory damages with post-judgment interest but with pre-judgement interest excluded. Further Respondent was ordered to reimburse Claimant's attorneys' fee in the amount of $62,136.00.

Bill Singer's Comment

A few years back, many folks felt pressured by the Great Recession and sold their businesses or, faced with the inability to locate a job, bought a business as a way of obtaining a job. Depending upon whether the coin came up heads or tails, some of those purchases turned out profitable and others collapsed into litigation. It's difficult to discern too much about the background of this arbitration because the FINRA Arbitration Decision is quite sparse. Notwithstanding, this case is instructional as to answering the age-old question from all wannabe plaintiffs/claimants:  What can we allege if I sue them?  Here, we have quite the smorgasbord of causes of action; and, for good measure, requests for both an injunction and constructive trust!

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