FINRA fined a broker-dealer $2.75 million for anti-money laundering ("AML") program and supervisory deficiencies.
According to the Letter of Acceptance, Waiver, and Consent, the firm failed to properly investigate certain third-party attempts to gain unauthorized access to its electronic systems, which should have led to the filing of Suspicious Activity Reports. FINRA stated that this failure was largely the result of the firm's use of a "fraud case chart," which provided inaccurate guidance to employees about reporting requirements related to incidents when third parties attempted to "compromise a customer's email or brokerage account" through electronic means.
Additionally, FINRA alleged that the firm failed to file or amend certain forms, which are used to report customer complaints related to its registered representatives, due to an overly restrictive interpretation of its filing requirements. FINRA also claimed that the firm failed to timely file certain required amendments to its registered representatives' Forms U-4.
FINRA acknowledged the firm's cooperation with the investigation and efforts to remedy the violations. The firm neither admitted to nor denied the charges.
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