Brokers to pay $17 million for AML failures

The Financial Industry Regulatory Authority (FINRA) has announced it has fined Raymond James & Associates, Inc. (RJA) and Raymond James Financial Services, Inc. (RJFS) a total of $17 million for widespread failures related to the firms’ anti-money laundering (AML) programs. RJA was fined $8 million and RJFS was fined $9 million for failing to establish and implement adequate AML procedures, which resulted in the firms’ failure to properly prevent or detect, investigate, and report suspicious activity for several years. RJA’s former AML Compliance Officer, Linda L. Busby, was also fined $25,000 and suspended for three months.

The agency said "RJA and RJFS’ significant growth between 2006 and 2014 was not matched by commensurate growth in their AML compliance systems and processes. This left RJA and Busby, as RJA’s AML Compliance Officer from 2002 to February 2013, and RJFS unable to establish AML programs tailored to each firm’s business, and forced them instead to rely upon a patchwork of written procedures and systems across different departments to detect suspicious activity. The end result was that certain “red flags” of potentially suspicious activity went undetected or inadequately investigated. These failures are particularly concerning given that RJFS was sanctioned in 2012 [$400,000 fine] for inadequate AML procedures and, as part of that settlement, had agreed to review its program and procedures, and certify that they were reasonably designed to achieve compliance."

• FINRA Letter of Acceptance, Waiver and Consent