Ex-Ameriprise Broker Ordered to Cover Firm’s Tab in Client Dispute

This article was originally published by AdvisorHub.com

A former Ameriprise Financial broker in Los Angeles was ordered to pay the firm $675,000 to cover the costs of a settlement that the firm made with a former client, according to an arbitration award published by the Financial Industry Regulatory Authority on Friday.

The three-person panel held the former broker, Li-Lin Hsu, ultimately liable after Ameriprise claimed that it should be indemnified for the client’s damage claim, according to the decision.

The client, Wan Yu Luo, sued Ameriprise in September 2015 for $805,000 claiming it was negligent in its supervision of Hsu. Luo claimed Ameriprise assigned Hsu as her financial advisor and also failed to notify her after it had suspended Hsu for violation of company policy and regulations, according to the award.

Ameriprise, however, denied the allegations and filed a “third party claim” against Hsu. The firm sought “equitable indemnity and implied indemnity” on the grounds that Hsu “concealed her actions” so Ameriprise “could not have reasonably discovered them,” according to a summary provided in the award.

The firm decided in March to settle with Luo in March for $675,000, according to a record of the case on Hsu’s BrokerCheck. Luo dismissed her claim at that time, but the firm continued to press the third-party claim against Hsu.

“We are pleased by the FINRA decision to hold Hsu accountable for her actions,” a spokeswoman for Ameriprise wrote in an emailed statement.

Hsu represented herself in the arbitration and did not show up to the hearing, according to the award. She did not return a message requesting comment.

A lawyer for Luo, Spencer Davidson, did not return a call for comment.

Ameriprise suspended Hsu on March 9 and later fired her on March 27 for violations of company policy, including “maintaining a beneficiary relationship with a client, complaint handling, commingle funds and conducting business with a former client,” according to BrokerCheck.

Finra barred Hsu, who spent all of her 9-year career at Ameriprise in February 2016, after she failed to respond to an earlier request for information during a Finra investigation, according to BrokerCheck.

Hsu has two other customer complaints listed on her BrokerCheck report. One was dismissed, and another from January 2017 is pending. The clients in that case are seeking $1 million for allegations that Hsu advised them to “purchase a failing and unprofitable business for her personal gain.” They also claim that she illegally borrowed money from them, according to the the report.

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