Ameriprise 2011 Annual Report Download - page 54

or adverse publicity that could have a material adverse effect on the Company’s consolidated financial condition or results
of operations.
Certain legal and regulatory proceedings are described below.
In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express
Financial Advisors Inc., was filed in the United States District Court for the District of Arizona, and was later transferred to
the United States District Court for the District of Minnesota. The plaintiffs alleged that they were investors in several of the
Company’s mutual funds and they purported to bring the action derivatively on behalf of those funds under the Investment
Company Act of 1940 (the ‘40 Act). The plaintiffs alleged that fees allegedly paid to the defendants by the funds for
investment advisory and administrative services were excessive. Plaintiffs seek an order declaring that defendants have
violated the ‘40 Act and awarding unspecified damages including excessive fees allegedly paid plus interest and other
costs. On July 6, 2007, the district court granted the Company’s motion for summary judgment, dismissing all claims with
prejudice. Plaintiffs appealed the district court’s decision, and on April 8, 2009, the U.S. Court of Appeals for the Eighth
Circuit reversed the district court’s decision, and remanded the case for further proceedings. The Company filed with the
United States Supreme Court a Petition for Writ of Certiorari to review the judgment of the Court of Appeals in this case in
light of the Supreme Court’s anticipated review of a similar excessive fee case captioned Jones v. Harris Associates. On
March 30, 2010, the Supreme Court issued its ruling in Jones v. Harris Associates, and on April 5, 2010, the Supreme
Court vacated the Eighth Circuit’s decision in this case and remanded it to the Eighth Circuit for further consideration in
light of the Supreme Court’s decision in Jones v. Harris Associates. Without any further briefing or argument, on June 4,
2010, the Eighth Circuit remanded the case to the district court for further consideration in light of the Supreme Court’s
decision in Jones v. Harris Associates. On December 8, 2010, the district court re-entered its July 2007 order granting
summary judgment in favor of the Company. Plaintiffs filed a notice of appeal with the Eighth Circuit on January 10, 2011.
The Eighth Circuit Court heard oral arguments of the parties on November 17, 2011. The Company is awaiting the Court’s
ruling.
In November 2010, the Company’s J. & W. Seligman & Co. Incorporated subsidiary (‘‘Seligman’’) received a governmental
inquiry regarding an industry insider trading investigation, as previously stated by the Company in general media reporting.
The Company continues to cooperate fully with that inquiry. Neither the Company nor Seligman has been accused of any
wrongdoing, and the government has confirmed that neither the Company nor any of its affiliated entities is a target of its
investigation into potential insider trading.
In October 2011, a putative class action lawsuit entitled Roger Krueger, et al. vs. Ameriprise Financial, et al. was filed in
the United States District Court for the District of Minnesota against the Company, certain of its present or former
employees and directors, as well as certain fiduciary committees on behalf of participants and beneficiaries of the
Ameriprise Financial 401(k) Plan. The alleged class period is from October 1, 2005, to the present. The action alleges that
Ameriprise breached fiduciary duties under ERISA by selecting and retaining primarily proprietary mutual funds with
allegedly poor performance histories, higher expenses relative to other investment options, and improper fees paid to
Ameriprise Financial, Inc. or its subsidiaries. The action also alleges that the Company breached fiduciary duties under
ERISA because it used its affiliate Ameriprise Trust Company as the Plan trustee and record-keeper and improperly reaped
profits from the sale of the record-keeping business to Wachovia Bank, N.A. Plaintiffs allege over $20 million in damages.
On January 17, 2012, all defendants filed a brief and other documents in support of their motion to dismiss the
complaint. Plaintiffs filed an amended complaint on February 7, 2012. An amended briefing and hearing schedule for the
motion to dismiss this amended complaint will be set by the court.
Item 4. Mine Safety Disclosures.
Not applicable.
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