On July 30, 2008, the SEC announced it settled charges against E*Trade Clearing LLC and E*Trade Securities for AML (anti-money laundering) violations. According to the release, E*Trade failed to comply with rules requiring securities firms to verify the identities of their customers and to document their procedures with complying with AML rule and regulations.
The SEC found that, from October 2003 to June 2005, E*Trade failed to verrify the identity of over 65,000 customers, in violation of the USA PATRIOT act and SEC rules. Without admitting or denying anything, E*Trade settled the charges, and will pay a $1 Million fine. The SEC noted that E*Trade personnel discovered, and then rediscovered, the deficiency in their CIP (customer identification program) but failed to take any corrective actions for nearly 2 years.
Comments