NFL player sues Ameriprise over broker he claims stole $15 million

A running back with the Dallas Cowboys has filed a $15 million lawsuit against Ameriprise Financial, claiming the investment company kept quiet when it found out one of its financial advisers was looting his account.

Darren McFadden, who was the fourth overall pick in the 2008 NFL draft, said Ameriprise launched an internal investigation of the broker's handling of his account in January 2010 but failed to notify him of its concerns. He said the company also failed to alert him when it suspended the broker 10 months later.

As a result, McFadden claims in the lawsuit, he maintained his relationship with the broker until 2015, when he began trying to sell his home in Oakland for a move to Dallas after signing with the Cowboys. At that point, according to McFadden, the broker disclosed that there was not enough money in his account to purchase his new home in Dallas for cash.

Over an eight-year period, McFadden claims, the broker stole or lost at least $15 million.

"This is a case about Ameriprise Financial's negligence and active concealment of its former employee and 'financial adviser' who, while working at Ameriprise Financial, manipulated plaintiff Darren McFadden at a young age to seize broad and sweeping control over all of plaintiff's professional income, assets and retirement savings," McFadden said in the lawsuit.

Ameriprise officials declined to comment on the allegations, noting that the company "just learned of Mr. McFadden's suit and have not yet received it."

McFadden's allegations echo the findings of three enforcement actions against Ameriprise since 2011 by the federal Financial Industry Regulatory Authority (FINRA), which has repeatedly fined Ameriprise for failing to adequately supervise its brokers and allowing those employees to steal from the company's clients.

In two of those cases, federal regulators also faulted Ameriprise for dragging its feet when investigating employee misconduct.

"The settlements you cite from prior years were isolated and unrelated matters which we detected," Ameriprise said in a written statement. "The individuals' actions were in clear violation of our policies. We took appropriate action to address the matters and we fully remediated impacted clients. We have a rigorous compliance program in place which we continually invest in to serve our clients."

With nearly 10,000 financial advisers, Ameriprise is one of the largest investment companies in the U.S.

The Minneapolis-based company, which manages more than $800 billion in assets, earned $1.3 billion on revenue of $11.7 billion in 2016.

McFadden was just 20 when he signed a $60 million, six-year contract to play for the Oakland Raiders in 2008. He turned to an Ameriprise adviser named Michael Eugene Vick Jr., a longtime family friend who grew up with McFadden in Little Rock, Ark.

McFadden gave Vick power of attorney in 2008. Vick allegedly told McFadden he needed sweeping control over McFadden's money to help him "avoid the 'financial disasters' that tend to flow from unsound spending habits, poor management or speculative financial advice," according to McFadden's 2016 lawsuit against Vick.

In court filings, Vick — who is not related to the former NFL quarterback with the same name — has denied any wrongdoing. The case is set for trial in April 2018.

In response to written questions from McFadden's attorneys, Vick disclosed that he was fired from his job as a broker with Merrill Lynch in 2000 after working in the company's New York office for just eight months.

He then went to work for the Ameriprise Financial office in Little Rock.

McFadden claims Ameriprise became suspicious of Vick's work on his behalf in January 2010, when the firm officially reprimanded him and placed him on "heightened supervision," according to his lawsuit. McFadden said the company discovered that Vick had engaged in "suspicious and unauthorized account activity" dealing with his investments.

Despite the company's concerns, McFadden claims in the lawsuit, Ameriprise did not notify him and allowed Vick to transfer more than $3 million out of his accounts over the next 10 months. Vick quit shortly after Ameriprise suspended him in October 2010, according to the lawsuit.

McFadden said Ameriprise "allowed Vick to fabricate a false pretext" for his departure. With no reason to suspect Vick, McFadden allowed him to close his Ameriprise accounts and move those assets to other financial institutions. He said Vick claimed the move would save him money.

As part of a "systematic embezzlement" of McFadden's money, Vick allegedly made more than 1,000 cash withdrawals from McFadden's account totaling $8 million, according to the lawsuit.

McFadden signed a one-year contract extension this year with the Cowboys for a reported $980,000. He led the Cowboys in rushing in 2015 with 1,089 yards but missed the first 13 games of the 2016 season following elbow surgery.

Instead of keeping quiet about a problem employee, Ameriprise should have reported its findings of misconduct to FINRA and him, McFadden claims.

A FINRA representative said companies such as Ameriprise are required to notify the agency if it suspends an adviser and provide the reasons for doing so. The agency could not discuss whether there is an ongoing investigation into Vick but there are no public enforcement actions against him.

The agency has penalized Ameriprise for ignoring red flags involving the theft of funds from other clients.

In September 2016, Ameriprise paid an $850,000 fine to settle an investigation over the theft of $750,000 from five Ameriprise customers. Regulators said the misconduct "went undetected for two years because Ameriprise failed to establish, maintain and enforce a supervisory system" capable of detecting fraud.

Though several improper wire transfers were flagged by the company's Anti-Fraud Operations Group because of "possible signature discrepancies," the group ultimately approved each of them.

Regulators said other suspicious transfers were not promptly reviewed "because the employee responsible for reviewing the report was instructed by his supervisor to prioritize other work."

In the consent order, Ameriprise did not admit or deny the findings.

Jeffrey Meitrodt • 612-673-4132