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FINRA has issued its first-ever guidance to its member broker-dealers about the penalties that will be imposed for violating anti-money laundering rules.
Issued on Thursday, the guidelines from Finra are aimed at stepping up the scrutiny of member companies’ anti-money-laundering efforts.
As per the new guidelines, FINRA could impose a fine ranging from $10,000 to $310,000 for small firms that haven’t implemented monitoring measures to report suspicious transactions.
Fines for the same violation that could be imposed on medium and large firms start at $50,000 and have no upper limit, FINRA said.
Compliance with AML regulations under the Bank Secrecy Act has been a continuing focus of Finra’s enforcement efforts, a spokeswoman said in an email, referring to the regulator’s actions against Interactive Brokers LLC, BNP Paribas SA and Morgan Stanley.
“By creating specific AML guidelines, Finra has provided greater transparency and relevant factors that identify when AML violations are more serious and should result in higher fines,” she added.
Emily Gordy, a partner at law firm McGuireWoods LLP and a former enforcement official at Finra, said in an email that while much of this information was available through a survey of cases the agency has worked on over the years, it was important to bring it all together.
“The industry and practitioners don’t have to go on a ‘treasure hunt’ to find the relevant information,” she added.
Apart from fines, FINRA said it would also consider suspending or even expelling firms for certain wrongdoing. In cases where Finra finds a firm’s anti-money-laundering program deficient, the agency recommends fines of $10,000 to $100,000 for small firms and $20,000 to $310,000 for midsize and large firms.
The factors it takes into consideration when imposing a fine include the nature, size and risk profile of the firm’s customer base.