American Express Financial Advisors

American Express Financial Advisors Settlement Granted Final Approval

American Express Financial Advisors

American Express Financial Advisors Settlement Granted Final Approval - read more

Between 1999 and 2004, hundreds of thousands of consumers and investors sought and paid for financial advice from American Express Financial Advisors (AEFA). Investors turned to these financial advisors because of their promises of informed, objective, personalized, and unbiased advice. Former AEFA clients allege that despite these promises, AEFA charted a course of business that defrauded and manipulated their fee-paying advisory clients, using the financial advisory segment of its immense sales organization to advance their interests, rather than the client's interests. On November 8, 2002, the Haritos lawsuit was filed against American Express Financial Advisors, Inc ("AEFA") on behalf of AEFA clients who purchased financial plans. This action was filed in the United States District Court for the District of Arizona, alleging American Express Financial Advisors' past and continuous violations of the Federal Investment Advisors Act of 1940. Zimmerman Reed represents the proposed class. In August 2005 Zimmerman Reed filed a Motion for Class Certification in the Haritos matter. The Motion argued that in perpetrating its scheme, AEFA/Ameriprise executives enriched themselves by creating incentive programs for financial advisors to sell American Express proprietary products, which imposed an inherent conflict of interest that impaired the advisor's ability to render objective and unbiased advice. According to the Motion, this kind of scheme constitutes a breach of fiduciary duty under federal regulation for investment advisors, the IAA. The IAA allows for rescission - or money back - for violations of the Act.

During March/April of 2004, several similar actions were commenced in the U.S. District Court for the Southern District of New York on behalf of clients of AEFA who purchased mutual funds in the American Express family of mutual funds, alleging the American Express Company ("AEC"), American Express Financial Corporation ("AEFC"), and AEFA violated federal securities laws by failing to provide objective advice and steering clients into purchasing their funds. The New York cases were subsequently consolidated under the title In re American Express Financial Advisors Securities Litigation (" In re AEFA "). A Consolidated Amended Complaint was filed by Lead Counsel for In re AEFA plaintiffs in September 2004. On January 18, 2007, In re AEFA Lead Counsel reached agreement with AEFA/Ameriprise and entered into a Stipulation of Settlement, resolving the plaintiffs' claims. The Haritos plaintiffs and their claims are included in this settlement. On February 15, 2007, the New York District Court issued an Order provisionally certifying the Class, directing that Notice be sent out to potential class members, and setting a Fairness Hearing on the proposed settlement. The Notice, which should be mailed to potential class members by March 22, 2007, defines the Class as follows:

All persons and entities who, at any time from and including March 10, 1999, through and including April 1, 2006 ("Class Period"):

(i) Paid a fee for financial advice, financial planning, or financial advisory services pursuant to a Financial Advisory Service Agreement;

(ii) Purchased any of the Non-Proprietary Funds through AEFA or for which AEFA was listed as the broker;

(iii) Purchased any of the AXP Funds through AEFA or for which AEFA was listed as the broker; and/or

(iv) Paid a fee for financial advice, financial planning, or other financial advisory services rendered in connection with an SPS, WMS and/or SMA account.

The Notice will also be published in the Wall Street Journal and Parade Magazine shortly after the initial mailing. Individuals who meet the Class definition and who would like to be included in the settlement will be required to submit a valid Proof of Claim by July 10, 2007. For further information on the proposed settlement call toll free 888.212.5605 or, go online to www.FinancialSettlementFee.com

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