SEC Sanctions BD and President/CCO for Customer Identification Failures
The SEC has censured a broker-dealer and its President/CCO for failing to conduct applicable customer identification of omnibus sub-account holders using its direct market access software. According to the SEC, the firm offered its direct market access software to its mostly non-US client base. Without any intermediary conducting customer identification, the SEC stated that the Respondent maintained this responsibility under the Bank Secrecy Act and Rule 17a-8. The SEC alleged that, notwithstanding the Respondent’s stated policies and procedures, the firm did not conduct adequate customer identification and often obtained incomplete documents or documents in foreign languages. The SEC also charged the President/CCO because he was “obligated to ensure” compliance with the firm’s anti-money laundering obligations.