A broker-dealer (the "Firm") agreed to pay $14.5 million to settle allegations by FinCEN, FINRA and the SEC of deficiencies in its anti-money laundering ("AML") program.
According to FINRA, the Firm allegedly failed to establish and implement AML programs designed to monitor specific high-risk transactions in customer accounts, including foreign currency wire transfers and transactions in "penny stocks." According to FinCEN, the Firm failed to develop and implement a risk-based AML program associated with accounts that included both traditional brokerage and banking-like services. In addition, FinCEN asserted, the Firm had insufficient staffing, which led to a backlog of alerts and affected the Firm's ability to file suspicious activity reports ("SARs"). According to the SEC, the Firm allegedly failed to file SARs in compliance with reporting requirements of the Bank Secrecy Act. The SEC said that in addition to buying and selling securities offerings, the Firm provided customers with other services, such as cross-border wires, internal transfers between accounts and check writing, but did not properly monitor for, detect and report suspicious activity pertaining to those services and non-resident alien customer accounts.
Taking into consideration the Firm's remedial acts, FinCEN, FINRA and the SEC fined the Firm a total of $14.5 million. The Firm neither admitted to nor denied FINRA's and the SEC's findings. However, the Firm admitted to FinCEN's findings.
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