Firm Settles SEC Charges for AML Program Deficiencies

A firm settled SEC charges for anti-money laundering compliance deficiencies related to its Customer Identification Program ("CIP") and Customer Due Diligence ("CDD") obligations. 

According to the Order, the firm (i) failed to verify customer accounts properly, and lacked consistent procedures for retaining verification records and tracking CIP-related actions; (ii) failed to timely close accounts that failed CIP screening, (the firm's AML policies failed to specify a timeline for closing accounts with unresolved CIP issues); and (iii) allowed high-risk accounts to remain open (specifically, in violation of its own policy, the firm allowed thousands of accounts for cannabis-related businesses and customers in certain foreign jurisdictions).

The SEC determined that the firm violated SEA Section 17(a) ("Records and Reports") and Rule 17a-8 ("Financial recordkeeping and reporting of currency and foreign transactions").

To settle the charges, the firm agreed to (i) cease and desist from further violations, (ii) a censure and (iii) pay a $18 million civil penalty.