The Financial Industry Regulatory Authority (FINRA) announced Wednesday that it has fined three firms a total of $900,000 for failing to establish and implement adequate anti-money laundering (AML) programs and other supervisory systems to detect suspicious transactions. FINRA also fined and suspended four executives involved.
FINRA imposed the following sanctions.
- Atlas One Financial Group, Miami, fined $350,000; Napoleon Arturo Aponte, former chief compliance officer and AML compliance officer, fined $25,000 joint and severally with the firm, and suspended for three months in a principal capacity;
- Firstrade Securities, Flushing, N.Y., fined $300,000; and
- World Trade Financial Corp. (WTF), San Diego, fined $250,000; President and Owner Rodney Michel fined $35,000 and suspended in all capacities except as a financial operations principal for four months; Chief Compliance Officer Frank Brickell fined $40,000 and suspended from association in all capacities for nine months; trade desk supervisor and minority owner Jason Adams fined $5,000 and suspended for three months in a principal capacity
“Today’s actions reinforce FINRA’s continued focus on firms’ ability to identify and respond to potential misuse and abuse of the markets,” said Brad Bennett, FINRA executive vice president and chief of enforcement. “Firms must have adequate AML and supervisory systems in place to detect and report suspicious transactions.”
In concluding these settlements, Atlas One, Firstrade, WTF, Aponte, Michel, Brickell and Adams neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
FINRA found that between February 2007 and May 2011, Atlas One failed to identify suspicious account activity or did not adequately investigate numerous AML “red flags.”
For example, in 2007, the U.S. Department of Justice (DOJ) froze six Atlas One accounts that were controlled by one customer in connection with a money laundering scheme, according to FINRA. “Even though the accounts listed the same mailing address in San Jose, Costa Rica, and an email address for another Atlas One customer as contact information for the account and the other customer’s information had been utilized as contact information for the frozen accounts, Atlas One failed to perform any additional scrutiny of the accounts that had not been part of DOJ’s action,” FINRA said in a statement.
FINRA also found that “certain customers’ accounts engaged in a pattern of activity consisting of moving millions of dollars through the accounts while conducting minimal-to-no securities transactions.” Atlas One’s AML program “required Aponte to monitor for potentially suspicious activity and AML red flags, investigate suspicious activity and report suspicious activity by filing a suspicious activity report (SAR), when necessary, which he failed to do,” FINRA said.