Broker-Dealer Fined for CIP and AML Deficiencies

A broker-dealer settled FINRA charges for failing to comply with FINRA's AML compliance program requirements.

FINRA Rule 3310 requires each member firm to develop and implement a written AML compliance program reasonably designed to achieve and monitor the firm's compliance with the requirements of the Bank Secrecy Act and its implementing regulations.

According to FINRA, the broker-dealer violated FINRA Rule 3310 by failing to comprehensively implement its written Customer Identification Program (or "CIP"), including failure to implement procedures requiring information collection and verification for opened accounts. As such, the firm failed to verify the identity of each customer to "the extent reasonable and practicable" for multiple accounts.

Moreover, the broker-dealer violated FINRA Rule 3310 by failing to implement written policies and procedures relating to the detection and reporting of suspicious transactions.

To settle the charges, the broker-dealer agreed to: (i) a censure; (ii) payment of a $35,000 fine; and (iii) compliance with the undertaking outlined in the FINRA Acceptance, Waiver and Consent form.