Money laundering remains a significant focus of financial industry regulators. In August 2020, the SEC, CFTC and FINRA all resolved enforcement proceedings arising out of alleged deficiencies in a firm’s anti-money laundering (AML) program. FINRA has now resolved an enforcement proceeding against the firm’s AML compliance officer, who allegedly failed to implement the AML program, lacked sufficient knowledge of its operations, ignored red flags and did not understand when the firm was obligated to file suspicious activity reports. The proceeding is yet another reminder of the close regulatory focus on the implementation of appropriate and effective compliance policies and procedures – and of the regulators’ continued willingness to hold compliance officers accountable for serious compliance failures. This article explores FINRA’s allegations and the Letter of Acceptance, Waiver and Consent. See “AML Program Failures May Draw Scrutiny From Multiple Regulators
” (Sep. 10, 2020); and “FinCEN Issues First AML/CFT Priorities
” (Aug. 26, 2021). For additional discussion of CCO liability, see “A Look at the NSCP’s Firm and CCO Liability Framework
” (Feb. 24, 2022); our two-part series on the NYC Bar framework for CCO liability: “Components and Proposals
” (Jul. 15, 2021); and “CCO and Regulator Perspectives
” (Jul. 22, 2021); as well as our two-part series “What a Recent SEC Opinion on a FINRA Disciplinary Action Says About CCO and CEO Liability”: Part One
(Jan. 24, 2019); and Part Two
(Jan. 31, 2019).