A broker-dealer settled FINRA charges for failing to implement
an adequate AML program for the firm's penny stock
business.
According to the FINRA Letter of Acceptance, Waiver and Consent
("AWC"), the broker-dealer and its former affiliate
failed to (i) monitor transactions in penny stocks or securities
that were traded outside of traditional exchanges; (ii) confirm
that sales of penny stocks fell within an applicable exemption from
registration under the Securities Act of 1933; (iii) conduct
reviews of foreign currency wire transfers, including transfers
involving high-risk entities and jurisdictions; and (iv) provide
personnel with the necessary information to identify and report
potentially suspicious transactions. FINRA found that even though
the firms were made aware of deficiencies in their AML Program,
they failed to improve their procedures for approximately three
years, or to provide adequate resources for the firms' AML
Program.
