Firm Settles FINRA Charges for Failing to Conduct AML Compliance Testing

A firm settled FINRA charges for failing to conduct adequate independent testing of its AML compliance program. 

According to the AWC, the firm was subject to a two year testing requirement, rather than an annual requirement, under FINRA Rule 3310(c) ("Anti-Money Laundering Compliance Program") because it was a firm that "does not execute transactions for customers or otherwise hold customer accounts or act as an introducing broker." FINRA found that the firm failed to timely conduct independent testing of its AML compliance program, despite receiving warnings to do so. In addition, FINRA found that the firm failed to have written AML procedures that testing be conducted by an independent party.

As a result, FINRA found that the firm violated FINRA Rules 3310(c) and 2010 ("Standards of Commercial Honor and Principles of Trade"). 

To settle the charges, the firm agreed to (i) pay a $2,500 fine and (ii) undertakings as outlined in the AWC. FINRA explained that the fine was very low as the firm had little revenue.