Ameriprise 2013 Annual Report Download - page 58

In accordance with applicable accounting standards, the Company establishes an accrued liability for contingent litigation
and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably
estimated. In such cases, there still may be an exposure to loss in excess of any amounts reasonably estimated and
accrued. When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability,
but continues to monitor, in conjunction with any outside counsel handling a matter, further developments that would make
such loss contingency both probable and reasonably estimable. Once the Company establishes an accrued liability with
respect to a loss contingency, the Company continues to monitor the matter for further developments that could affect the
amount of the accrued liability that has been previously established, and any appropriate adjustments are made each
quarter.
Certain legal and regulatory proceedings are described below.
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 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.
Plaintiffs filed an amended complaint on February 7, 2012. On April 11, 2012, the Company filed its motion to dismiss
the Amended Complaint, which was denied on November 20, 2012. The parties are engaged in discovery. On July 3,
2013, the Company moved for summary judgment on statute of limitations grounds. The hearing on the motion was heard
on August 14, 2013, and the parties are awaiting a decision by the Court. A hearing on class certification was held on
December 10, 2013, and the parties are awaiting a decision. The trial is currently scheduled for March 1, 2015. The
Company cannot reasonably estimate the range of loss, if any, that may result from this matter due to the early procedural
status of the case, the absence of class certification, the lack of a formal demand on the Company by the plaintiffs and
plaintiffs’ failure to allege any specific, evidence-based damages.
In October 2012, a putative class action lawsuit entitled Jeffers vs. Ameriprise Financial Services, et al. was filed against
the Company in the United States District Court for the Northern District of Illinois relating to its sales of the Inland
Western (now known as Retail Properties of America, Inc. (‘‘RPAI’’)) REIT. The action also names as defendants RPAI,
several of RPAI’s executives, and several members of RPAI’s board. The action alleges that the Company failed to perform
required due diligence and misrepresented various aspects of the REIT including fees charged to clients, risks associated
with the product, and valuation of the shares on client account statements. Plaintiffs seek unspecified damages. The
Company was served in December 2012, and, on April 19, 2013, moved to dismiss the complaint. The motion has been
fully briefed and submitted to the Court for review and decision. The Company cannot reasonably estimate the range of
loss, if any, that may result from this matter due to the early procedural status of the case, the absence of class
certification, the lack of a formal demand on the Company by the plaintiffs and plaintiffs’ failure to allege any specific,
evidence-based damages.
In November 2012, a lawsuit entitled Versata Software, Inc., f/k/a Trilogy Software, Inc., et al. (‘‘Versata’’) v. Ameriprise
Financial, Inc., Ameriprise Financial Services, Inc. & American Enterprise Investment Services, Inc. was filed in the District
Court of Travis County, Texas relating to the Company’s licensing and use of software owned by Versata that the Company
uses to manage registration, licensing and compensation, among other things. The lawsuit alleges the Company violated
the terms of the license agreement by allowing an impermissible third-party contractor to decompile Versata’s software
code, and failing to have the third-party contractor execute individual non-disclosure agreements. The Company has alleged
counterclaims for wrongful termination and breaches of warranties, among other causes of action. Both sides have
asserted defenses to the claims and counterclaims. The relief requested by Versata is for the Company to return the
software and for other, unspecified, legal and equitable relief. The relief requested by the Company against Versata is
delivery and free use by the Company of the Versata source code. Ameriprise removed the dispute to federal court. That
removal is currently subject to a motion to return the case to state court. The matter is still in the discovery stage and no
trial date has been set. The Company cannot reasonably estimate the range of loss, if any, that may result from this
matter due to the procedural status of the case.
Item 4. Mine Safety Disclosures
Not applicable.
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