If your firm's anti-money laundering (AML) processes and systems aren't up to scratch, you could (individually and as a company) face eye-watering fines. Continuous learning could ensure you don't fall behind on AML.
In May this year, the US Financial Industry Regulatory Authority (FINRA) issued a fine of $17 million to a financial services company, Raymond James Financial Inc. The company's former anti-money laundering compliance officer, Linda Busby, was also suspended and fined. The main reason for the penalty? According to FINRA, the company's anti-money laundering processes did not match its business growth from 2006-14. During that period, the firm didn't update its AML compliance systems and was therefore unable to adequately monitor and prevent any suspicious transactions.
Is it easy to fall behind on AML compliance? Not if you're up-to-date
Evidently the US regulator found Raymond James Financial and the AML compliance officer at serious fault – not least because the firm had previously transgressed on AML regulations in 2012. However, it's possible to imagine a scenario in which a firm's growth could outstrip the extent of its compliance capability. This really underlines the importance of staying up-to-date with AML compliance laws and regulations. So, if you have responsibility for AML compliance, a positive step towards doing this would be to ensure you undertake continuous learning on the subject. One option is this course run by Thomson Reuters.
Regulatory eyes on SMEs
Two more factors highlighted by the FINRA ruling, as pointed out in this blog by legal writer Tiffany Robertson, are that FINRA has made it clear that individuals can be held responsible for their employer's compliance failures. In this case, the officer's main failings were not reviewing the company's AML policy and failing to address AML problems and flag these up to the CFO or CEO. The FINRA ruling also shows that smaller and mid-size firms that fail to comply with AML regulations can expect attention from the regulators.
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