Legal

Ex-Financial Manager Claims He Was Fired for Flagging Violations

By Staff Report

Oct. 15, 2010

A former branch manager for Ameriprise Financial Inc. has sued the company, alleging he was fired in November 2009 for raising serious allegations about the firm’s oversight of brokers.


Michael Loscalso, who began his career at the forerunner of Ameriprise in 1989, alleged in the lawsuit that his repeated complaints to management “about fraud, forgery and other practices which violated SEC rules and regulations led to the retaliatory termination of his employment” by Ameriprise. The lawsuit was filed Oct. 8 in U.S. District Court in the Eastern District of Pennsylvania in Philadelphia.


Loscalso is seeking unspecified damages from Ameriprise. He earned $260,000 per year and supervised more than 50 registered representatives and 60 licensed and unlicensed staff, at an Ameriprise branch in West Conshohocken, Pennsylvania.


The “whistle-blower” lawsuit further alleges that Loscalso was engaged in the “protected activity of reporting violations of Securities and Exchange Commission rules and regulations to management on numerous occasions throughout his employment and immediately prior to his termination.”


According to the lawsuit, the violations reported by Loscalso included incidents relating to forgery, fraud, unlicensed sales, unlicensed signing of documents, overcharging for financial planning services, underdelivery of financial planning advice, and breaches of client privacy and data security.


In one case that Loscalso said he reported, a broker’s assistant signed 30 annuity applications on the broker’s behalf. Ameriprise issued the rep a letter of caution and took no further action, according to the lawsuit. In another incident that Loscalso says he spoke up about, a broker allowed an unlicensed assistant to transact client business by processing and completing trades using the broker’s identification number.


Between the end of September 2009 and October 2009, Loscalso told “several members of management that he was considering alerting outside regulatory agencies, including the Financial Industry Regulatory Authority Inc. and the SEC, about his concerns regarding violations of SEC rules and regulations,” according to the lawsuit.


He was fired by Ameriprise on Nov. 5, 2009, according to the lawsuit. In a letter to Loscalso, Ameriprise managers said Loscalso was fired for cause due to a failure to supervise his advisers.


“We terminated Mr. Loscalso for performance,” wrote Chris Reese, an Ameriprise spokesman, in an e-mail. “The Department of Labor dismissed his case against Ameriprise and we will fight this baseless lawsuit vigorously.”  


Filed by Bruce Kelly of InvestmentNews, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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