US SEC fined Wells Fargo advisors $7 million for anti-money laundering violations

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  • The US Securities and Exchange Commission (SEC) has charged Wells Fargo advisors with failing to file at least 34 Suspicious Activity Reports.
  • The director of the Division of Enforcement voiced his concern about the issue.
  • The SEC will send a clear warning to all other registrants following this incident.

The US Securities and Exchange Commission (SEC) announced on Twitter on May 20 that it is pursuing charges against Wells Fargo Advisors for failing to timely file at least 34 Suspicious Activity Reports between April 2017 and October 21. A broker-dealer based in St. Louis, Wells Fargo Advisors, agreed to pay $7 million to settle the accusations.

According to the SEC’s order, the system failed to reconcile the different country codes used to monitor foreign wire transfers due to poor implementation and failure to test a new version of Wells Fargo Advisors’ anti-money laundering (AML) transaction monitoring alert system adopted in January 2019.

As a result, Wells Fargo Advisors failed to timely file at least 25 Suspicious Activity Reports (SARs) involving suspicious transactions in its customers’ brokerage accounts involving wire transfers to or from foreign countries determined to be at high or moderate risk for money laundering, terrorist financing, or other illegal money movements.

According to the investigation, Wells Fargo Advisors also failed to file at least nine other SARs due to the inability to properly enter wire transfer data into its AML transaction monitoring system in certain other scenarios.

When SEC registrants like Wells Fargo fail to comply with their AML duties, regulators are deprived of timely information about possible money laundering, terrorist funding, and other illegal money movements, according to Gurbir S. Grewal, director of the SEC’s Division of Enforcement.

The SEC decided that, in addition to holding Well Fargo Advisors accountable, it would send a clear message to other registrants that AML duties are “sacrosanct.”

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