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ARTICLE · 14 APRIL 2021

Firm And Principal Settle FINRA Charges For AML Compliance Program Violations

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A firm and its principal settled FINRA charges for failing to establish an adequate AML program and a supervisory system.

United StatesGovernment, Public Sector
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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A firm and its principal settled FINRA charges for failing to establish an adequate AML program and a supervisory system.

In a Letter of Acceptance, Waiver, and Consent, FINRA found that, although there was a principal responsible for monitoring the firm's AML compliance and reviewing red flags, the firm's AML procedures did not provide guidance regarding how that principal was to identify or review red flags. FINRA stated that the firm's review for potentially suspicious transactions was limited to that principal's manual review, even though that principal had no experience with the customer account business and the firm and its principal were aware of that principal's inexperience. Additionally, the firm's clearing firm contacted it on multiple occasions regarding suspicious transactions, but the notifications did not prompt action on the firm's part.

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