Security & Fraud

Raymond James’ AML Controls Found Lacking

Regulators Urge Tech Use Against Financial Crime

Raymond James has been fined $17 million in the wake of findings by the Financial Industry Regulatory Authority (FINRA) that the financial services company has shown failures in its internal controls geared toward money laundering. The regulatory agency said on Wednesday (May 18) that this is the biggest fine that has been imposed on AML deficiencies.

The investigation traced several years of failures stretching across Raymond James’ efforts to find suspicious activity that showed up in client investment accounts. Moreover, the firm failed to report that activity to the proper authorities. The same issues brought about a $400,000 fine four years ago, The New York Times reported.

Raymond James, in the wake of the fine, neither admitted nor denied wrongdoing. The firm’s former compliance officer, Linda Busby, was suspended for three months.

The firm did not scale its AML operations to keep pace with growth through the past several years, according to FINRA. There was inadequate investigation of suspicious activity from 2002 to 2013. The failures cited by the regulatory agency took place between 2011 to 2014. There was especially failure to monitor foreign accounts, said FINRA. The firm, in turn, said it is in the process of a wind-down of some of its business with foreign entities. In addition, Raymond James said it has made improvements to its day-to-day money laundering operations, with a growth in hiring new staff in that department.

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