INVESTORS: Former Ameriprise Financial Services broker Francis Joseph Velten was named in a complaint by FINRA after he failed to respond to FINRA’s requests for information.
Francis Joseph Velten (CRD#: 2291911) was registered as a broker with Ameriprise Financial Services from January 2020 until April 2022. Previously, Velten was registered as a broker with Independent Financial Group from 2018 until 2020.
Velten has ten disclosures on his BrokerCheck report. Three customer disputes filed against Velten were closed with no action taken and two were denied. Two of Velten’s settled customer disputes occurred more than ten years ago.
March 2022 Regulatory Judgment
Initiated By: FINRA
Allegations: Velten was named a respondent in a FINRA complaint alleging that he failed to respond in any way to FINRA’s requests for information in connection with its investigation into an allegation that he churned and flipped his elderly customers’ accounts at his member firm, encouraging them to surrender their annuities and sell mutual fund holdings away from the firm and use the proceeds to purchase bonus annuities.
Regulator Statement: Default decision rendered July 19, 2022, wherein Velten is barred from associating with any FINRA member in all capacities. The sanction is based on the findings that Velten failed to produce information and documents requested by FINRA in connection with its investigation into an allegation that he had churned and flipped customer accounts by encouraging his elderly customers to surrender their annuities, sell their mutual funds, and invest the proceeds into bonus annuities. The findings stated that, according to the allegation, Velten’s trading, which occurred away from his member firm, caused his customers to incur significant surrender charges while Velten benefited from the commissions. If no further action is taken, decision will become final August 16, 2022.
December 2016 Customer Dispute
Allegations: Unsuitable recommendations
Damage Amount Requested: $30,000.00
Settlement Amount: $14,900.00
Broker Comment: Claimant’s investment was suitable and overall their portfolio experienced appreciation. Mr. Velten agreed to settle this matter to avoid the expense and inconvenience of further proceedings and his agreement did not constitute the acknowledgement of any wrongdoing or liability.
April 2015 Customer Dispute
Allegations: Unsuitability of a Jackson National variable annuity purchased in March of 2011.
Settlement Amount: $10,000.00
Broker Comment: As the investment representative for the client, I was extremely careful to ensure the investment was consistent with her stated investment objectives and risk tolerance. I deny client’s assertions of wrongdoing. I, in fact, made full disclosure to her as is my usual approach with clients and prospective clients, and was particularly focused on ensuring her complete understanding because of her previous unsuccessful investment experience with another representative. We met in my office on 3 occasions for a total of 5 hours prior to the client investing in the variable annuity addressed in her letter of complaint. We met again for approximately one hour when the annuity contract was delivered at which time we carefully reviewed the policy, riders and subaccounts, as well as the Florida free look provision, after which the policy was given to the client and the delivery receipt signed. The free look option was not exercised by the client. Client alleges lack of suitability ten months after issuance of her annuity, and this was only after the value of her annuity declined due to the European debt crisis during the summer and fall of 2011 and its subsequent effect on the American economy. Additionally, the client fails to disclose in her complaint that her variable annuity experience includes ownership of two other variable annuities in which she and her husband invested through Nationwide Life Insurance Co over four years ago. The client was fully informed and willingly invested with full knowledge of all the relevant facts related to the investment.
March 2017 Customer Dispute
Status: Award / Judgment
Allegations: Adam Velten was a subject of the customer’s complaint against his member firm that asserted the following causes of action: violations of federal securities laws, including fraud in connection with the purchase or sale of securities; violations of Minnesota Securities Act, including misrepresentations, omissions of material fact, and employment of schemes to defraud and engaging in course of business which operated as a fraud or deceit; violations of the Minnesota Consumer Fraud Act, Uniform Deceptive Trade Practices Act, False Statement in Advertisement Act, and Unlawful Trade Practices Act; breach of contract; common law fraud; breach of fiduciary duty; and negligence and gross negligence. The causes of action related to Claimant’s allegations that Respondent invested Claimant’s funds in high-risk investments, which were contrary to his stated investment objectives. Claimant further asserted that Respondent engaged in improper short-term trading in closed-in funds and mutual fund and annuity switching, and recommended a low priced stock, which caused Claimant to incur unnecessary commissions and other fees.
Damage Amount Requested: $150,000.00
Broker Comment: After a complete arbitration hearing, an Award was entered granting Claimant’s compensatory damages of $115,855.81 plus 6% interest and reimbursement fees of $300.00. In this Matter I was not named as a party and no relief was sought against me. The statement of claim included numerous allegations, which were summarized by the arbitrators and reported verbatim on a Form U6 filed by FINRA, the FINRA report does not indicate that following a three and one-half day hearing on the merits, at which I testified, the FINRA-DR arbitration panel, did not make any finding that I violated any law, rule or regulation. The amount of compensatory damages awarded claimant was far less then sought at the close of the hearing. Furthermore, Claimants request for costs, attorney’s fee and punitive damages were all denied. Finally, I neither contributed to the award nor did the Firm ask me contribute to the award.
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