Broker-Dealer Fined for AML Compliance Violations

A broker-dealer settled FINRA charges for failing to implement an AML program "designed to detect and cause the reporting of suspicious cyber-events."

According to FINRA, the broker-dealer's cybersecurity policy had no requirement to review cyber-events for AML purposes and file suspicious activity reports accordingly. As a result, FINRA said that the broker-dealer failed to investigate five cyberattacks, one of which resulted in a bad actor wiring funds to a third-party account. FINRA said that the broker-dealer failed to file any suspicious activity reports on the cyberattacks.

FINRA determined that the broker-dealer violated FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade") and Rule 3310 ("Anti-Money Laundering Compliance Program"). To settle the alleged rule violations, the broker-dealer agreed to (i) a censure and (ii) a civil monetary penalty of $100,000.