On Dec. 26, FINRA fined Morgan Stanley $10mn for AML failures.
- Morgan Stanley Smith Barney fined for failures in AML program and supervision.
- Had AML program and supervisory failures that spanned a period over five years.
- Used surveillance system, that did not receive critical data from several systems.
- Undermined surveillance of tens of billions of dollars of wire and foreign currency transfers, including transfers to, from countries, known for having high AML risk.
- Alerts generated by automated surveillance system were not reviewed therefore,
analysts closed alerts, without investigating potentially suspicious wire transfers.
- There was no monitoring of deposits, trades in penny stock for suspicious activity
even though customers deposited approximately 2.7 billion shares of penny stock.
- This resulted in subsequent sales, totaling approximately $164mn in time period.
- Bank divided vetting of customers’ deposits and sales among branch management.
- Two of the home office departments lacked reasonable coordination among them.
- Relied on customer assurances that stock they sought to deposit was unrestricted.
- No policies, procedures, and controls to ensure periodical risk-based reviews were made of correspondent accounts being maintained for foreign financial institutions.