Broker-Dealer Settles FINRA Charges for Bank Secrecy Act Compliance Failures

A broker-dealer settled FINRA charges for failing to review information requests from FinCEN and for failing to conduct an independent annual audit of its AML program.

In a Letter of Acceptance, Waiver and Consent, FINRA stated that the broker-dealer did not (i) search its records following a request from FinCEN (ii) designate an employee responsible for searching records and (iii) implement written procedures that provide direction on how to complete FinCEN-requested searches. In addition, FINRA found that the individual designated to conduct the annual testing of the broker-dealer’s AML compliance program was not independent of the firm and lacked the necessary training. FINRA added that the broker-dealer failed to conduct a risk-based review of its AML program required under the Bank Secrecy Act.

As a result, FINRA determined that the broker-dealer violated FINRA Rules 3310 ("Anti-Money Laundering Compliance Program") and 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the broker-dealer agreed to a (i) censure and (ii) $25,000 fine.