On August 22, FINRA accepted a Letter of Acceptance, Waiver, and Consent (AWC) from a broker-dealer member firm regarding its alleged failure to establish and implement policies and procedures designed to detect suspicious transactions in accordance with AML requirements. Specifically, from April 2020 to August 2023, the firm allegedly applied a $25,000 threshold for filing suspicious activity reports (SARs) — the threshold used by national banks — instead of the $5,000 threshold required for broker-dealers under 31 C.F.R. § 1023.320(a)(2). According to FINRA, this resulted in the firm failing to timely file 42 SARs related to account intrusions, identity theft, and internet scams.
FINRA determined these actions constituted violations of FINRA Rules 3310(a) and 2010. In assessing the penalty, FINRA considered several mitigating factors, including that the firm: (i) self-identified the issue after reviewing a similar FINRA enforcement action; (ii) conducted a six-year lookback; (iii) retroactively filed the missing SARs; (iv) amended its written procedures; and (v) enhanced staff training. The firm consented to a censure and a $500,000 fine without admitting or denying the findings.
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