, a subsidiary of Ameriprise Financial Inc.
, suffered a blow Monday after a National Association of Securities Dealers
arbitration panel ordered the firm to pay $22 million to a group of former Exxon Mobil
The amount, one of the biggest awards imposed against a Wall Street firm, includes close to $3.5 million in punitive damages, The Wall Street Journal
The complaint was brought by 32 retired Exxon employees, who claimed that their broker, David McFadden of Securities America, had advised them to place their retirement savings mostly in variable annuities and mutual-fund B shares without disclosing the high fees associated with the investments. In doing so, Mc Fadden placed his interest ahead of that of his clients, the group said.
The plaintiffs lost much of their retirement savings and some have had to rejoin the workforce, said Joe Peiffer, the group's lawyer.
In a regulatory filing
on Tuesday, Securities America said it disagrees with the arbitration panel's decision and intends to file a motion to vacate the award. If the award is sustained, its impact would not be material to Ameriprise Financial's earnings, according to the filing.
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