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February 25, 2015 at 09:53 AM
Securities and Exchange Commission Enforcement Chief Andrew Ceresney told broker-dealers Wednesday that compliance with the Bank Secrecy Act “is not optional,” and that a BD’s failure to file a required suspicious activity report (SAR) “is, by itself, a basis for enforcement action.”
Speaking at the Securities Industry and Financial Markets Association’s 2015 Anti-Money Laundering & Financial Crimes Conference in New York, Ceresney said that of the approximately 4,800 broker-dealers in the U.S., all of which are required to file SARs with the SEC when necessary, the number of firms that file “zero SARs or one SAR per year [is] disturbingly large.”
Said Ceresney: “I can’t say that each firm necessarily failed to file SARs that it should have filed. But these findings are troubling, and suggest a need for further investigation.”
Ceresney said the Enforcement Division’s Broker-Dealer Task Force — which is developing broker-dealer initiatives that can be implemented Division-wide — will now also pursue “standalone BSA violations to send a clear message to the industry about the need for compliance.”
More than half of all the SARs filed by the securities industry last year were filed “by fewer firms than are represented in this room,” Ceresney said. “Recall, that’s out of a population of between four and five thousand. Judging by the numbers, I find it hard to believe that the industry as a whole is fulfilling its obligations.”
The nature of the BD industry, he said, “and the sheer volume of transactions executed each year suggest to me that this number is far too low.”
