FinCEN Fines NY-Based Securities Broker-Dealer for Anti-Money Laundering Shortfalls

Anti-Money Laundering FinCEN SEC Bank Secrecy Act

On January 27, FinCEN fined a New York securities broker-dealer firm $20 million for violating the BSA. According to the press release, the firm failed to (i) establish an adequate anti-money laundering program; (ii) conduct proper due diligence on a foreign correspondent account; and (iii) comply with Section 311 of the USA Patriot Act. These failures resulted in customers engaging in suspicious trading, including prohibited third-party activity and illegal penny stock trading, without it being detected or reported. The firm must pay $10 million of the $20 million penalty to the US Department of the Treasury. The remaining $10 million will be paid to the SEC to settle a parallel enforcement action.