Industrial and Commercial Bank of China Financial Services (ICBCFS), the US subsidiary of Industrial and Commercial Bank of China, has been fined by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) for failing to monitor suspicious transactions.

FINRA fined the bank $5.3m, alleging that it lacked an effective anti-money laundering programme to detect suspicious transactions, mainly those involving penny stocks, or reasonably investigate red flags.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

The watchdog said that ICBCFS started clearing and settling equity transactions since 2012. The company cleared and settled 33 billion of penny stock shares between January 2013 and September 2015, FINRA said.

FINRA executive vice president of department of enforcement Susan Schroeder said: “Member firms are obligated to implement an AML program that is reasonably designed to address the unique money laundering risks posed by their business.  Firms that engage in high-risk activities such as penny stock clearing are the gatekeepers to the market and must establish a reasonable supervisory system to detect and report suspicious trading activity.”

SEC fined ICBCFS $860,000, alleging that the company failed to report suspicious sales of penny stock shares worth billions even after warning signs. The regulator also accused the bank of financial record-keeping and operational violations.

SEC director of New York Regional Office Marc Berger said: “As gatekeepers to the securities markets, brokerage firms, including clearing firms, must take their anti-money laundering obligations seriously. The failure to file SARs in the face of numerous red flags is unacceptable.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

ICBC agreed to the settlements without admitting or denying the allegations.