by Michael J. Leotta, David H. Tutor, and Cindy M. Bi
From left to right: Michael J. Leotta, David H. Tutor, and Cindy M. Bi (Photos courtesy of WilmerHale)
The SEC recently announced AML-related charges against an individual registered representative for failing to escalate red flags of potentially suspicious activity, as well as charges against a registered investment adviser for causing mutual funds it advised to fail to adopt an AML program reasonably designed for its business. Taken together, these enforcement actions reflect the continued expansion of the SEC’s efforts to police AML compliance beyond the traditional charges against broker-dealers for failures to file Suspicious Activity Reports (“SARs”). The SEC is not only willing to penalize a broker-dealer or its compliance personnel who fail to file timely SARs, but is also willing to charge individuals and entities that contribute to or cause AML failures.