FINRA fined and suspended a financial services firm's Compliance Officer for failing to ensure that the firm conducted periodic risk reviews. It also levied stiff penalties on two branches of the firm for these failures. FINRA found that the firm failed to (i) conduct required due diligence and periodic risk reviews for foreign financial institutions and (ii) establish and maintain an adequate Customer Identification Program. FINRA noted that these compliance failures occurred after the firm was sanctioned for inadequate Anti-Money Laundering ("AML") procedures in 2012, and after agreeing to review its compliance programs and procedures.
FINRA Executive Vice President and Chief of Enforcement Brad Bennett emphasized that:
The monitoring for suspicious transactions is an essential part of protecting [the] financial system and firms must allocate adequate resources to their AML compliance efforts. This case demonstrates that when there are broad-based failures within specific areas of responsibility, [FINRA] will seek individual liability where appropriate.
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