Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2012
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.
January 2012
Centrade Securities Corp.
AWC/2009016149901/January 2012
Centrade failed to implement a reasonably designed AML compliance program. The firm acted in contravention of AML requirements and its own procedures by failing to adequately monitor for, detect and investigate suspicious transactions notwithstanding multiple red flags presented by the trading in a customerís account. In most instances, suspicious activity related to one or more of the red flag categories identified in the firmís AML compliance procedures, including 
  • substantial fluctuations in the customerís account value during the period in which the account was maintained at the firm;
  • unexplained and extensive wire activity, including a large number of third-party incoming wires (some of which originated from international banks); and
  • a wire transfer from the customerís account for $39,000 sent to a country identified as a known money-laundering risk and bank-secrecy haven. 
Centrade Securities Corp.: Censure; Fined $15,000 (lower fine imposed in consideration of "firm's revenues and financial resources"
Tags:  Money Laundering    AML     |    In: Cases of Note : FINRA
Bill Singer's Comment
A succinct and helpful FINRA abstract.  Contains some helpful guidance.
Puritan Securities, Inc. later known as First Union Securities, Inc
AWC/201002087520/January 2012
The Firmt failed to implement a reasonably compliant Anti-Money Laundering Compliance Program (AMLCP). 

The firm failed 
  • to ensure that its registered representatives received AML training,
  • to ensure that new account files contained evidence that the firm had verified clientsí identities,
  • to conduct an independent test of its AMLCP, and
  • to maintain its required minimum net capital while conducting a securities business. 
The findings also included that the firmís procedures required its designated principal to conduct inspections of the firmís Office of Supervisory Jurisdiction (OSJ) each year and of its branch locations every two years. The procedures also required annual compliance meetings with registered persons. For almost two years, the designated principal did not ensure that the firm held an annual compliance meeting and the principal did not perform any inspections of the firmís OSJ or branch offices during that time period.
Puritan Securities, Inc. later known as First Union Securities, Inc: Censured; Fined $15,000
Tags:  AML    Annual Compliance Meeting    OSJ     |    In: Cases of Note : FINRA
Bill Singer's Comment
How do you not ensure that the annual compliance meeting is held for two years and, on top of that, you don't perform OSJ/Branch inspections for the same period?  That's one hell of an oversight, particularly when coupled with the AML lapses.
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