PARIS—The 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 $15 million for failures associated with penny stock deposits and resales, and wire transfers, from February 2013 to March 2017, Private Banker International reported.
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 program for its penny stock business during the period noted above.
According to the regulator, the AML program 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, Private Banker International said.
However, the firm’s AML program failed to review such wire transfers and assess the involvement of high-risk entities, the regulator added.
Other Allegations
Furthermore, FINRA alleged that the AML program was significantly understaffed for a major period.
BNP agreed to the settlement without accepting or refuting the allegations, Private Banker International said.
“In order to be effective, a firm’s AML program must be tailored to the firm’s business model and types of customer transactions,” stated Jessica Hopper, FINRA senior vice-president and acting head of enforcement. “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.”