WASHINGTON – Industry regulators have fined discount brokerage firm Scottrade Inc. $600,000 for allegedly inadequate money laundering controls to detect suspicious transactions.
The Financial Industry Regulatory Authority, the brokerage industry's self-policing organization, on Monday announced the civil fine against Scottrade. The St. Louis-based online investing firm did not admit or deny FINRA's allegations.
Like banks, brokerage firms are required to establish anti-money laundering policies, procedures and internal controls.
U.S. officials have voiced concern about the laundering of money through the country's financial system as a way to finance terrorism or other criminal activity.
FINRA said that Scottrade — handling about 150,000 trades daily in 2007 — failed to establish an adequate anti-money laundering program tailored to its online business model. Scottrade's business model and elevated trading volume create an increased risk of identity theft, hacking into accounts and the use of customer accounts to launder money using securities between 2003 and 2008, FINRA said.
Each brokerage's anti-money laundering program "must be tailored to its business model, including the technological environment in which the firm operates," Susan Merrill, FINRA's executive vice president and chief of enforcement, said in a statement.
Scottrade failed to establish any systematic or automated surveillance system until 2005, and that system was inadequate, Merrill said.
Scottrade spokeswoman Kelly Doria said the firm "made enhancements to our anti-money laundering program and are glad to have put this matter behind us."
Source
No comments:
Post a Comment