By PAUL O’DONOGHUE, Senior Correspondent
FinCEN has fined broker-dealer Canaccord Genuity a record $80 million for violating U.S. AML rules.
The organisation, the AML unit of the U.S. Treasury Department, said the penalty is the largest ever imposed on a broker-dealer under the Bank Secrecy Act (BSA).
Andrea Gacki, FinCEN’s director, said: “Today’s action should be a wake-up call to broker-dealers that willfully fail to comply with their obligations to safeguard the financial system from illicit actors.
FinCEN said the firm had widespread compliance failures. These included weaknesses in its AML programme, poor risk-based customer due diligence, and weak controls to monitor transactions for suspicious activity.
“Canaccord failed to file at least 160 suspicious activity reports (SARs) relating to dozens of different over-the-counter securities, the trading of which involved a high volume of underlying suspicious transactions that FinCEN estimates to be in the thousands,” FinCEN said.
“This deprived law enforcement of timely and critical financial information pertaining to suspicious activity.”
Ms Gacki added: “FinCEN is committed to holding accountable financial institutions of all types—including institutions accessing our world-class capital markets—that willfully ignore their role in preventing and reporting illicit actors who seek to take advantage of hardworking Americans.”
Investigators also found the firm onboarded high-risk customers with reported links to illicit actors.
As part of the settlement, Canaccord admitted “that it willfully violated the BSA,” FinCEN said. FinCEN said the firm also conceded that it failed to maintain an effective AML programme. It also failed to conduct required due diligence on correspondent accounts for foreign financial institutions. In addition, the firm did not file SARs when required.
FinCEN said it worked on the case with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority.
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