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SEC Slams BD for Routinely Violating Anti-Money Laundering Rules

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Salt Lake City-based Alpine Securities Corp. was charged by the Securities and Exchange Commission on Monday with failing to adhere to anti-money laundering rules by alleging the broker-dealer cleared transactions for microcap stocks that were used in manipulative schemes to harm investors.

The SEC’s complaint alleges that the broker-dealer “routinely and systematically” failed to file suspicious activity reports for stock transactions that it flagged as suspicious. 

When the BD did file SARs, “Alpine Securities allegedly frequently omitted the very information that formed the bases for Alpine knowing, suspecting or having reason to suspect that a transaction was suspicious,” the SEC states.

Guidance for preparing SARs from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) clearly states that “[e]xplaining why the transaction is suspicious is critical,” the complaint states.

The complaint cites the following SARs infractions by Alpine:

• Systematically omitting from at least 1,950 SARs material, “red-flag” information of which it was aware and was required to report under its own BSA Compliance Program, such as a customer or issuer’s criminal or regulatory history, evidence of stock promotion, or whether a customer was a foreign financial institution, including at least 1,150 SARs which included only the customer name, date of deposit, dollar value of deposit, and the name of the security deposited;

• Filing SARs only on the deposit of stock in approximately 1,900 instances in which the stock was subsequently liquidated, but failing to file required SARs on subsequent related transactions such as the liquidation, or transfer of funds resulting from the liquidation, even though it had identified the deposit of the security as suspicious; and

• Failing to file at least 250 SARs within the required 30 days after the date the suspicious activity was detected

Julie Lutz, director of the SEC’s Denver Regional Office, stated that by failing to file SARs, “Alpine Securities deprived regulators and law enforcement of critically important information often related to trades in microcap securities used to investigate potentially serious misconduct.”


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