The Financial Industry Regulatory Authority Inc. (FINRA) has imposed a $1.5 million fine against brokerage firm Wells Fargo Advisors for failing to comply with anti-money laundering (AML) requirements.
FINRA found that Wells Fargo failed to properly verify the identity of more than 200,000 customers from 2003 to 2012. Accurately identifying a customer is one of the basic underpinning of AML policies. Apparently, Wells Fargo’s failure was due to a design flaw in the firm’s client verification program. FINRA rules require brokerage firms to maintain a system that is reasonably expected to comply with the firm’s AML obligations. Apparently Wells Fargo failed to do that.
