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Finra Fine Sends a Warning: Clearing Firms Must Know Their Customers, Uncover Suspicious Activity
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The nation's largest nongovernmental regulator of securities is signaling it wants executing brokers to know their customers better, even when the clients come from larger firms.
The nation's largest private securities regulator penalized Oppenheimer & Co. more than $1.4 million for violations related to penny stock trades, a fine that could spur smaller firms to review for similar problems.
The number of fines levied by the U.S. nongovernmental regulator of securities and brokerage firms more than doubled in the first five months of 2012 compared to the same period in 2011.
Securities regulators are likely to increasingly penalize firms that fail to identify the beneficial owners of accounts controlled by so-called "master" accounts, according to Alma Angotti, the former senior counsel in the Financial Industry Regulatory Authority's enforcement department.
Some firms under the purview of the nation's largest independent securities regulator are failing to meet anti-money laundering compliance standards despite spending enough money to do so, according to an agency regulator.
E*Trade has been fined $1 million by the Financial Industry Regulatory Authority for inadequate anti-money laundering policies and procedures. The action follows on a $1 million penalty levied by the Securities and Exchange Commission six months ago against the on-line brokerage.
