FINRA Fines Three Firms $900,000 for AML Violations; Also Two Compliance Officers

FINRA announced that it has fined three firms a total of $900,000 for failing to establish and implement adequate anti-money laundering ("AML") programs and other supervisory systems to detect suspicious transactions. FINRA also fined and suspended four individuals, including two compliance officers. &

One firm failed to perform any additional scrutiny of accounts that were related to a prior finding of misconduct. FINRA also found that certain customers' accounts engaged in a pattern of activity consisting of moving millions of dollars through the accounts while conducting minimal to no securities transactions. The firm's AML program required the compliance officer to monitor for potentially suspicious activity and AML red flags, investigate suspicious activity and report suspicious activity by filing a suspicious activity report ("SAR"), when necessary, which he failed to do.

The second firm was an online trading firm catering to the Chinese community. That firm failed to implement an adequate AML program to detect and report suspicious transactions, including potential manipulative trading. Many of the suspicious transactions involved Chinese issuer stocks and some of the most suspicious activity in customer accounts was apparent pre-arranged trades of Chinese issuer stock done in related accounts.

As to the third firm, the firm and the CCO failed to create and enforce a supervisory system and written supervisory procedures to monitor for unlawful transactions in unregistered penny stocks.

Click here to learn more (links externally to FINRA website).

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