The US Financial Regulatory Agency has censured and fined Actinver, a full-service US retail brokerage, for a slew of anti-money-laundering problems including the inadequate surveillance of politically-exposed persons or PEPs.
Between 26 August 2015 and 11 March 2017, Actinver failed to establish and implement an anti-money-laundering (AML) programme that could be reasonably expected to detect and cause the reporting of suspicious activity. Its AML surveillance system generated reports that were inaccurate and failed to capture certain potentially suspicious activity.
In addition, the firm failed to tailor its AML programme to the risk presented by its practice of allowing customers to engage in foreign currency exchange and maintain accounts used primarily for managing cash. Actinver broke FINRA Rules 3310(a) and 2010. It also failed to conduct an adequate independent AML test in 2016, becausethe testingfailed to review key aspects of the firm’s AML programme. Therefore, the firm violated FINRA Rules 3310(c) and 2010 and failed to make its Chief Executive Officer complete its Annual Certification Requirement in 2015 and 2017, thereby breaking FINRA Rules 3130(b) and 2010.
The firm failed to implement the part of its AML programme that obliged it to keep an eye on senior foreign political figures. Its AML procedures required it to conduct enhanced due diligence or EDD whenever one of these people opened an account. In some instances, the firm failed to conduct basic checks. As a result, it did not identify 15 accounts as belonging to senior foreign political figures and therefore did not subject them to EDD. For 18 accounts that the firm identified as PEP accounts, it failed to conduct the EDD required by its procedures for 12.
In addition, the firm monitored asset movements for PEP accounts in the same way as it did for other accounts and subjected those accounts to no additional monitoring. It did not identify the owner of a business account as a senior political figure, even though he was a former member of the Mexican government, his father was a former General in the Mexican Army and his brother (also with an account not identified as a PEP account) was the former CEO of a Mexican state-owned company. The account was not designated as a PEP account or subjected to higher levels of monitoring.