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Securities Compliance Sentinel Analysis of cutting-edge securities industry issues

What Broker-Dealers Need To Know About FINRA

Posted in Broker-Dealer Regulation, Financial Industry Trends, FINRA Compliance, FINRA Enforcement

Recently, FINRA publicized penalties against three companies and associated individuals for failing to implement adequate anti-money laundering procedures.  These fines should serve as a warning to the industry as a whole that FINRA is very focused on AML policies and procedures.

In its announcement, FINRA noted that the firms failed to implement adequate procedures to detect and monitor suspicious transactions.  Key to each finding was that the firms failed to identify red flags of money laundering activities and, in doing so, failed to investigate suspicious activity or file suspicious activity reports.  The fines were in the hundreds of thousands of dollars and individuals were suspended.

So what does this mean for you?  For one, you should take this warning to heart.  FINRA is taking a very strict look at firm AML policies and procedures.

Revisit your policies and procedures now.  Ask yourself this question; do my policies and procedures have those key components designed to identify red flags to detect and prevent money-laundering activity.   If the answer is no, you have work to do, and we can help.