The Financial Industry Regulatory Authority (FINRA) fined a former AML compliance officer and suspended her for failing to conduct required due diligence and periodic risk reviews of foreign financial institutions.
Linda L. Busby, formerly from Raymond James & Associates, Inc., was fined $25,000 and suspended for three months.
FINRA also fined Raymond James and an affiliate $17 million for widespread anti-money laundering failures.
Busby was the AML compliance officer for Raymond James from 2002 to February 2013.
FINRA said Raymond James grew quickly between 2006 and 2014. Because of the growth, Busby and Raymond James were “unable to establish AML programs tailored to each firm’s business.”
Instead they relied on “a patchwork of written procedures and systems across different departments to detect suspicious activity.”
The end result, FINRA said, was that certain “red flags” of potentially suspicious activity went undetected or inadequately investigated.
FINRA sanctioned Raymond James in 2012 for inadequate AML procedures. As part the 2012 settlement, the firm agreed “to review its program and procedures, and certify that they were reasonably designed to achieve compliance.”
Brad Bennett, FINRA’s enforcement chief, said the latest AML failures were “made even more egregious” by the previous sanction for the same offenses.
Raymond James failed to conduct required due diligence and periodic risk reviews for foreign financial institutions, FINRA said.
Busby failed to ensure that Raymond James’s “reviews were conducted.”
Raymond James and Busby consented to FINRA’s findings but neither admitted nor denied the charges.
FINRA is the biggest independent regulator for all securities firms doing business in the United States. In 2015, it brought 1,512 disciplinary actions against registered brokers and firms and levied $95 million in fines.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He’ll be the keynote speaker at the FCPA Blog NYC Conference 2016.