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ARTICLE · 23 JULY 2021

Firm Settles FINRA Charges For AML Program Deficiencies

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A firm settled FINRA charges for failing to establish a reasonable AML program designed to report suspicious transactions, and for failing to respond reasonably to red flags associated with China-based accounts.

United StatesGovernment, Public Sector
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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A firm settled FINRA charges for failing to establish a reasonable AML program designed to report suspicious transactions, and for failing to respond reasonably to red flags associated with China-based accounts.

In a Letter of Acceptance, Waiver, and Consent ("AWC"), FINRA stated that the basis of the firm's business was a self-directed trading platform that accepted accounts from customers located in jurisdictions with heightened money laundering risks, such as the People's Republic of China. FINRA found that the firm's AML program had several deficiencies, leading the firm to:

  • not properly surveil for potentially suspicious transactions;
  • rely on a manual review of the daily blotter that did not reflect cancelled order data or patterns of trading across accounts or over multiple days; and

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