The former anti-money-laundering (AML) compliance officer of a large broker-dealer firm recently settled a FINRA enforcement matter in which he personally agreed to pay a $25,000 fine for failing to oversee his employer’s AML program. In addition to the fine, the individual was prohibited from associating with any FINRA member for two months from the date of the settlement and agreed to an undertaking to complete ten hours of AML education. This settlement followed an earlier FINRA settlement in 2020 in which the same firm agreed to pay a $38 million fine to settle claims related to its AML program.
As set forth in the FINRA letter of acceptance, waiver and consent related to the settlement, FINRA’s allegations against the former AML compliance officer included the following:
- Failure to “meaningfully familiarize” himself with and understand the day-to-day operations and implementation of the firm’s AML program;
- Failure to perform a monthly review of at least one of the firm’s surveillance reports, as required by the firm’s written procedures, and to understand the firm’s AML risk profile;
- Failure to supervise the firm’s AML analysts;
- Failure to ensure the adequacy of the firm’s AML investigations; and
- Failure to file suspicious activity reports (SARs) after learning of suspicious activity from regulators or law enforcement agencies. FINRA specifically indicated that the firm filed only three SARs in response to 37 regulatory inquiries from FINRA and the SEC during a two-year period.
The FINRA letter of acceptance, waiver and consent is available here.