FINRA Fines Firm For Failing to Implement Automated AML System
FINRA fined a large on-line brokerage firm $600,000 for failing to implement an automated anti-money laundering system. FINRA criticized the firm’s manual, people-based system as insufficient given the large volume of trades executed through the firm. FINRA noted that the manual system resulted in the lack of review of many exception reports and the failure to consider account intrusions. FINRA also chided the firm for inadequate training to detect suspicious activity.
OUR TAKE: We interpret this action as FINRA warning large firms that it will have a high burden to prove that its manual or proprietary AML system is adequate. One obvious solution is to utilize a commercially-available technology solution.
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