On November 5, 2007, FINRA announced that it expelled Franklin Ross, Inc., a broker-dealer, from FINRA membership for violations of anti-money laundering rules, and that it suspended and fined the current president of the firm, as well as the firm's former president. This was pursuant to a settlement agreement entered into by the firm and the two individuals, where the three respondents settled without admitting or denying anything.
This is worth a read by all compliance and AML folks - click the link above for the press release. Firms need to understand the seriousness that FINRA and the SEC place on AML issues. In this case, FINRA found that the firm:
failed to investigate and report numerous suspicious transactions;
failed to obtain adequate background information on new accounts;
failed to conduct an independent test of its AML program; and
failed to provide AML training (presumably to its employees as the rule requires).
The press release also noted that the two individuals violated supervision, record-keeping and registration requirements.
Serious allegations = serious and very significant consequences.
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