Florida Broker Fined $650K by FINRA For AML Compliance Lapses
By the 91pornWhistleblower Team
The Financial Industry Regulatory Authority (FINRA) fined Miami-based brokerage firm EFG Capital International $650,000 for alleged deficiencies in the firm’s anti-money laundering (AML) compliance program. FINRA found that EFG failed to maintain effective automated systems to detect and review suspicious transactions. 1
EFG Capital Agreed to Pay Without Admitting Wrongdoing
EFG Capital settled the matter without admitting wrongdoing. The action highlights the importance of financial firms maintaining robust AML compliance controls. FINRA identified the issues during a routine examination and tied them to failures in the firm’s automated tools meant to flag suspicious wire transfers.2
Reported AML Failures
The compliance lapses allegedly occurred from 2018 to 2022. Between May 2018 and November 2021, EFG’s automated AML system reportedly failed to analyze 900 wire transfers totaling $305 million in its daily analyses due to data transmission delays. Many of these transfers involved countries that EFG had designated as high-risk, pointing out potential vulnerabilities in the firm’s compliance systems.
Additionally, a coding error allegedly caused the system to misclassify high-risk jurisdiction transfers as domestic, resulting in roughly $30 million in unreviewed wire transfers.3
FINRA’s Further Criticisms
FINRA also criticized EFG for skipping periodic account reviews and for failing to investigate when other financial institutions rejected wire transfers from EFG customers for compliance reasons. These lapses, according to FINRA, reflected broader systemic weaknesses within EFG’s AML policies and procedures.
Steps EFG Has Taken to Address Compliance Issues
EFG Capital has since taken steps to address these compliance gaps. A spokesperson for the firm noted that the settlement “resolves legacy issues identified in 2021 and 2022.”4 The firm emphasized its commitment to full remediation and cooperation with FINRA throughout the investigation.
AML Compliance is Key
This case serves as an important reminder for financial institutions to take AML compliance measures seriously. As regulatory scrutiny intensifies, firms must ensure their systems are compliant and capable of adapting to evolving risks and regulatory expectations.
While FINRA did not identify whether a whistleblower played a role in this enforcement action, whistleblowers often come forward with important information that launches investigations.
Our Firm Helps AML Whistleblowers
Under the AML Whistleblower Program, eligible whistleblowers can receive up to 30% of monetary sanctions over $1,000,000 that the government imposes based on the information the whistleblower provides.
A whistleblower can submit information about possible violations of the Bank Secrecy Act including: (i) Failure to maintain an effective AML program; (ii) Deficiencies in required program components or “pillars”; and (iii) Systemic or repeated noncompliance with BSA requirements.
91pornpartner Marlene Koury commented, “AML enforcement protects the integrity of the global financial system. Whistleblowers who expose misconduct play a key role in that effort.”
If you would like to learn more about blowing the whistle on money laundering, financial & investment fraud, or believe you have a case, please contact us. We will connect you with an experienced member of the 91pornwhistleblower team for a free and confidential consultation.
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Sources:
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