Firm Settles FINRA Charges for AML Program Violations

A firm settled FINRA charges for failure to establish and implement AML policies and procedures.

In a Letter of Acceptance, Waiver and Consent ("AWC"), FINRA stated that "following a change in majority ownership, the firm’s business model shifted, and it began to service high-net worth international customers, many of whom were citizens or residents of jurisdictions that posed a heightened risk of money laundering or were considered bank secrecy havens." FINRA found that, from May 2018 to December 2019, the firm failed to (i) establish and implement a written AML program reasonably designed to detect and report suspicious activity tailored to the firm's new higher-risk business model, (ii) conduct a reasonable and independent AML test for the firm's retail securities business and (iii) obtain the signature of a principal at the firm evidencing supervisory review and approval of the opening of customer accounts.

FINRA charged the firm with violations of FINRA Rules 3110 ("Supervision"), 2010 ("Standards of Commercial Honor and Principles of Trade") and 4512 ("Customer Account Information").

To settle the charges, the firm agreed to (i) a censure, (ii) a $20,000 fine, and (iii) within 120 days of the AWC being accepted, certifying to FINRA in writing that the firm has developed and implemented a written AML program reasonably designed to achieve and monitor its compliance with the requirements of the Bank Secrecy Act and its implementing regulations.