They said they tried to keep the project on life support, in hopes that it would be revived by the next administration, but the loss of key personnel, budget cuts and dropped investigations are only a few of many challenges made worse by the passage of nearly a year since Trump took office.
First, Credit Suisse primarily relied on its registered representatives to identify and escalate potentially suspicious trading, including in microcap stock transactions.
In practice, however, high-risk activity was not always escalated and investigated, as required. The firm also chose not to utilize certain available scenarios designed to identify common suspicious patterns and activities, and it failed to adequately investigate activity identified by the scenarios that the firm did utilize.
Its AML compliance department was then required to investigate the potentially suspicious activity, document its findings and file Suspicious Activity Reports SARs where appropriate. However, the systems and procedures the firm used to monitor trading for other purposes were not designed to detect potentially suspicious activity in order to cause the filing of a SAR, where appropriate, and the other departments and branches of the firm did not effectively assume responsibility for reviewing trading for AML reporting purposes.
However, no one at the firm reviewed the activity in the account for AML purposes. The firm used an automated surveillance system to identify red flags of potentially suspicious activity. FINRA found that the firm failed to implement the automated surveillance system properly, including by failing to ensure that the data that was being fed into the system was adequate and by failing to utilize available scenarios that were applicable to the money-laundering risks presented by its business.
Although Credit Suisse self-identified some of the deficiencies and retained a consulting firm to assist in evaluating them, the firm initially failed to devote adequate resources to resolve the issues in a timely fashion, and some of the deficiencies remain unresolved today.
In addition, FINRA found that Credit Suisse did not have adequate staffing to review the tens of thousands of alerts the automated system generated in any given year. Certain Credit Suisse customers deposited and sold microcap shares through the firm, which should have raised red flags indicating that the shares were potentially part of an illegal distribution.
As a result, FINRA found that from tothe firm facilitated the illegal distribution of at least 55 million unregistered shares of securities. The firm subsequently implemented additional procedures limiting the trading of microcap securities.
The investigation was conducted by the Department of Enforcement.
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For more information, please visit www.WASHINGTON — The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Credit Suisse Securities (USA) LLC $ million for anti-money laundering (AML), supervision and . The stakes are higher than ever for anti-money laundering (AML).
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An anti-money laundering (AML) program is a set of procedures designed to guard against someone using the firm to facilitate money laundering or terrorist financing.