US-based watchdog Financial Industry Regulatory Authority (FINRA) has fined BNP Paribas Securities and BNP Paribas Prime Brokerage for lapses in anti-money laundering (AML) and supervisory systems.
The divisions will pay a collective fine of $15m for failures associated with penny stock deposits and resales, and wire transfers, from February 2013 to March 2017.
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The settlement also requires the firm to achieve compliance within 90 days.
In a statement, FINRA noted that BNP did not put in place a written AML programme for its penny stock business during the aforesaid period.
According to the regulator, the AML programme also lacked proper surveillance to identify suspicious transactions until 2016.
BNP processed more than 70,000 wire transfers during the time with a combined worth of more than $230bn. It included over $2.5bn sent in foreign currencies.
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By GlobalDataHowever, the firm’s AML programme failed to review such wire transfers and assess the involvement of high-risk entities, the regulator added.
Furthermore, FINRA alleged that the AML programme was significantly understaffed for a major period.
BNP agreed to the settlement without accepting or refuting the allegations.
FINRA senior vice-president and acting head of enforcement Jessica Hopper said: “In order to be effective, a firm’s AML programme must be tailored to the firm’s business model and types of customer transactions.
“When customers engage in high-risk transactions involving low-priced securities and foreign currencies, the firm must devote sufficient resources to its AML program, including transaction and wire movement monitoring, to ensure that the system is tailored to the business’s unique money laundering risks.”
