FINRA Focuses on Anti-Money Laundering Procedures and Red Flags

Last week, the Financial Industry Regulatory Authority (FINRA) publicized penalties against three companies – as well as four associated individuals – that it found had failed to establish and implement adequate procedures for detecting money laundering and other suspicious transactions in violation of the Bank Secrecy Act, 31 U.S.C. § 5318. The enforcement actions and accompanying announcement demonstrate FINRA’s continued focus on anti-money laundering (AML) compliance programs, and why implementing effective procedures will help firms avoid regulatory actions or scrutiny.

FINRA’s announced settlements of three formal disciplinary proceedings that imposed a total of $900,000 in sanctions and suspensions on multiple securities-industry professionals. FINRA ordered Atlas One Financial Group (“Atlas One”), a Miami, Florida-based brokerage firm, to pay a $350,000 fine for failing to implement sufficient procedures to detect and monitor suspicious transactions, and fined and suspended the firm’s former chief compliance officer and AML compliance officer. FINRA also levied a $300,000 penalty against Firstrade Securities, Inc. (“Firstrade”), a Flushing, New York-based company that operates an online platform for securities trading. Finally, FINRA imposed a $250,000 fine against World Trade Financial Corporation (WTFC), a San Diego, California-based broker-dealer, and fined and suspended its president, chief compliance officer, and trade desk supervisor.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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