On May 8, 2013, FINRA announced that it fined three firms and four associated executives in connection with their failure to establish adequate anti-money laundering (AML) compliance programs.
Central to each action was a finding by FINRA that the firms failed to identify red flags of money laundering activities, and therefore failed to investigate suspicious activity and/or file a suspicious activity report. FINRA’s release provides specific examples of red flags that went unnoticed by the firms, but that ultimately caught FINRA’s attention. Broker-dealers and other financial institutions should carefully review the red flags identified by FINRA, which are important components of an adequate AML compliance program. Firms are also cautioned to heed the advice of third parties, such as clearing firms, that raise concerns regarding the legitimacy or propriety of certain transactions.
Click here to read our client alert, which provides more detail on these actions.