The US Securities and Exchange Commission has charged a brokerage firm in Salt Lake City with breaking federal securities laws by allegedly clearing transactions for microcap stocks that were used in manipulative schemes to harm investors.

To help detect breaches of securities and money-laundering laws, broker-dealers are required to send the Government suspicious activity reports (SARs) that describe suspicious transactions that take place through their firms.  

The SEC’s complaint alleges that Alpine Securities Corporation routinely and systematically failed to send off SARs for stock transactions that it flagged up as suspicious. When it did do so, it allegedly frequently omitted the very information that formed the basis for its staff knowing, suspecting, or having reason to suspect that the transaction in question was suspicious. As noted in the complaint, guidance for preparing SARs from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) clearly states that “[e]xplaining why the transaction is suspicious is critical.”

The SEC’s complaint charges Alpine Securities with thousands of infractions of s17(a) Securities Exchange Act 1934 and Rule 17a-8.