NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

A.B. Watley Direct, Inc.
OS/2005001121401

Acting through its Compliance Officer and Anti-Money Laundering Compliance Officer, the FIRM failed to establish and enforce an adequate and reasonable AML program, in that it failed to detect and investigate red flags of possible suspicious activity in customer accounts and failed to timely report such activity. Acting through the registered principal, the Firm failed to perform independent testing of the AML program during two years, performed an inadequate independent AML test in another year, and failed to establish and implement policies, procedures and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and implementing regulations thereunder.

Acting through individuals, the Firm conducted a securities business while it failed to maintain its minimum required net capital and, as a result ofits net capital calculation errors, it filed inaccurate quarterly Financial Operational &Combined Uniform Single (FOCUS) reports. The Firm failed to preserve and maintain copies of all of its internal and external emails asrequired.

A.B. Watley Direct, Inc.: Censured; Fined $125,000; Required to retain an Independent Consultant to conduct a review of the adequacy of its policies, systems and procedures, and training relating to its anti-money laundering (AML) compliance program; the firm was required to have its general securities principals register for eight hours of AML training and provide FINRA with evidence of completion of training.

Tags: AML