Monthly Archives: December 2018

HKMA JPMorgan AML HK$12.5mn

On Dec. 28, HKMA fined JPMorgan HK$12.5mn for AML breach. JPMorgan Chase Bank, NA, Hong Kong Branch settlement for AML contraventions. Per S. 19(2) and 19(3) of schedule 2 to AMLO (Chapter 615) of law of Hong Kong. Alleged Violations Bank contravened HK laws regarding AML and counter-terrorist financing control. Failed to establish procedures on…
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FINRA M, Stanley AML $10mn

On Dec. 26, FINRA fined Morgan Stanley $10mn for AML failures. Morgan Stanley Smith Barney fined for failures in AML program and supervision. Charges 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…
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HKMA Fund Sale Misconduct Risks

On Dec. 21, HKMA warned misconduct risks in selling of funds. HKMA letter to draw attention to misconduct risk in selling of investment funds. Provide guidance on expected standard of prevention and management of risk. Reminded registered institutions (RIs) to ensure investment recommendations, or solicitation for customers were reasonable in all circumstances. Firms must act…
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SEC Charges Two Robo-Advisers

On Dec. 21, SEC charged two robo-advisors with false disclosures. Wealthfront Advisers LLC (formerly known as Wealthfront), and Hedgeable Inc. Wealthfront Alleged Violations Wealthfront with $11bn client assets made false statements re tax-loss harvesting. Disclosed to that by employing its tax-loss harvesting strategy it would monitor all client accounts for transactions that might trigger a…
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SEC $1.8mn Fine Fund Disclosure

On Dec. 21, SEC fined IAs $18mn for fund disclosure violations. American Portfolios Advisors, PPS Advisors, and CEO/CIO, Lawrence Passaretti. Invested clients in mutual fund share classes that paid 12b-1 fees to the firms' investment adviser representatives (IARs), even when cheaper class available. Alleged Violations Firms did not disclose conflicts of interest, violated duty to…
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SEC $1.2bn Woodbridge Ponzi

On Dec. 19, SEC charged additional brokers in Woodbridge Ponzi. Charges against further 13 brokers, who sold Woodbridge securities to investors. Also charged 10 companies who had unlawfully sold these Woodbridge securities. Woodbridge Background Woodbridge collapsed into bankruptcy in Dec. 2017. and SEC previously charged company, its sowner and others with operating $1.2bn Ponzi scheme. 13…
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