SEC Fines Firm for SARs Reporting Failures

A dually registered firm settled SEC charges for failing to timely investigate and report suspicious transactions to FinCEN.

According to the Order, the firm (i) failed to promptly conduct reviews of certain potentially suspicious activity; (ii) took months or years to complete regulator and law enforcement requests to investigate suspicious activity; and (iii) violated its own policies and procedures on financial reporting, record-keeping and record retention and the filing of Suspicious Activity Reports ("SARs"). The SEC highlighted an example of the late filing of reports on 68 suspicious transactions totaling nearly $2 billion related to an entity that the regulator warned about two years earlier.

The SEC also found inadequate staffing for the firm's anti-money laundering monitoring group, which resulted in "aged" cases where potentially suspicious transactions were left unreviewed for extended periods.

The SEC concluded that the firm violated SEA Section 17(a) ("Records and Reports") and SEA Rule 17a-8 ("Financial Recordkeeping and Reporting of Currency and Foreign Transactions"). 

To settle the charges, the firm agreed to (i) a $4,000,000 civil money penalty, (ii) a censure and (iii) cease and desist from future violations. The SEC acknowledged remedial steps taken by the firm, including increased staffing, the establishment of dedicated investigative teams and the adoption of enhanced policies for SAR-related inquiries.