As a part of a flurry of strikes within the final days of the Biden administration, the Securities and Change Fee introduced fees towards dealer/seller and funding advisor LPL Monetary for a number of failures associated to its anti-money laundering program.
To resolve the SEC’s fees, LPL agreed to pay a civil penalty of $18 million and to implement enhancements to its AML insurance policies and procedures.
In response to the SEC order, from a minimum of Could 2019 by way of December 2023, LPL’s buyer identification program didn’t well timed shut accounts the place it had not correctly verified buyer identities. Moreover, LPL failed to shut or limit 1000’s of high-risk accounts, equivalent to cannabis-related and overseas accounts, that had been prohibited beneath LPL’s AML insurance policies.
“Federal legislation requires dealer/sellers to determine the identification of their prospects and to conduct ongoing buyer due diligence to help the federal government in its efforts to detect and stop cash laundering,” Stacy Bogert, affiliate director of the SEC’s Division of Enforcement, mentioned in a press release. “When dealer/sellers like LPL fail to adjust to their AML obligations, they put the securities markets in danger. Immediately’s case underscores the significance of complying with relevant laws within the areas of buyer identification and ongoing buyer due diligence.”
The SEC’s order discovered that LPL willfully violated Part 17(a) of the Securities Change Act of 1934 and Rule 17a-8. With out admitting or denying the SEC’s findings, LPL agreed to a censure and a cease-and-desist order along with the $18 million penalty. The SEC’s order additionally directs LPL to proceed its engagement with a compliance marketing consultant to assessment and suggest modifications to the agency’s AML insurance policies and procedures.
Representatives from LPL didn’t return a request for remark previous to publication.