by Jessica S. Carey, Roberto J. Gonzalez, Janus Schutte, and Samuel Kleiner
From Left to Proper: Jessica S. Carey, Roberto J. Gonzalez, Janus Schutte, and Samuel Kleiner (images courtesy of Paul, Weiss Rifkind, Wharton & Garrison LLP)
On March 6, 2026, the U.S. Division of the Treasury’s Monetary Crimes Enforcement Community (“FinCEN”) introduced a consent order with an $80 million civil cash penalty in opposition to Canaccord Genuity LLC (“Canaccord” or the “Agency”), an SEC-registered broker-dealer, for violations of the Financial institution Secrecy Act (“BSA”) in the course of the interval March 2018 to June 2024.[1] FinCEN famous that this enforcement motion marks “the most important penalty ever imposed in opposition to a broker-dealer for violating the BSA,” and FinCEN Director Andrea Gacki said that this motion is as “a wake-up name to broker-dealers that willfully fail to adjust to their obligations to safeguard the monetary system from illicit actors.”[2] The Securities and Trade Fee (“SEC”) and Monetary Trade Regulatory Authority (“FINRA”) individually introduced resolutions with the corporate for $20 million every, with FinCEN crediting Canaccord’s cost of these penalties.[3]
These coordinated enforcement actions underscore regulators’ continued deal with broker-dealers’ anti‑cash laundering (“AML”) applications. FinCEN’s findings emphasize that AML applications should be threat‑primarily based, adequately resourced, and supported by efficient knowledge and governance. On this memorandum, we talk about the enforcement actions and supply key takeaways for broker-dealers.
The Consent Order targeted on the Agency’s position as an “lively market maker[] in OTC low-volume and low-priced securities,” notably between 2018 and 2022. FinCEN famous that regulators have “repeatedly highlighted heightened dangers and ‘purple flags’ related to these kind of securities,” together with as a result of they “usually lack public data, don’t have any minimal itemizing requirements, lack liquidity, and have excessive volatility.”
Overview: FinCEN’s findings coated “a number of totally different points, however at its core, Canaccord didn’t dedicate satisfactory assets to make sure compliance with the BSA.” FinCEN famous that the Agency didn’t “sufficiently put money into the hiring, coaching, and oversight of AML personnel,” and studies “usually went unreviewed for months or years at a time by AML personnel.” FinCEN famous that the assets devoted to the Agency’s AML program had been “insufficient to handle the dangers the Agency’s enterprise mannequin entailed,” and for a few years “the staff accountable for reviewing Canaccord’s full suite of studies consisted of simply 4 staff, all of whom had further duties.” Additional, the Agency had no formal AML compliance coaching previous to November 2021. Common exams by FINRA recognized “deficiencies in Canaccord’s AML program, together with Canaccord’s failure to implement an satisfactory program for detecting and reporting suspicious exercise,” however Canaccord allegedly didn’t remediate the problems. Canaccord additionally allegedly didn’t conduct satisfactory impartial testing, with audit studies reflecting an “insufficient understanding of the dangers offered” by Canaccord’s enterprise traces and failing to establish “obvious gaps” in its controls.
The key AML points recognized by FinCEN embrace:
- Deficiencies within the Agency’s Commerce Surveillance Reviews: To watch for probably suspicious exercise, the Agency relied on “commerce surveillance studies” that FinCEN discovered suffered from “basic design flaws and longstanding knowledge points.” Sure studies had been generated utilizing a “handbook filter” designed to “handle the scope of the evaluate,” together with using “arbitrary numbers” with out “consideration for the precise threat profile of transactions captured by the report.” Because of this, thresholds had been “not cheap” underneath a threat‑primarily based framework, and a few studies had been “merely ‘too lengthy’ to evaluate.” These design and knowledge weaknesses had been compounded by extreme resourcing and governance failures. Oversight of this system was delegated to a Head of Buying and selling Compliance who “lacked prior AML expertise” and acquired minimal coaching, whereas “simply 4 Canaccord staff”—every with different non-trade surveillance duties—had been accountable for “reviewing greater than 100 distinctive studies,” lots of which had been run every day. FinCEN discovered that these deficiencies “brought about vital studies to go unreviewed—and suspicious exercise undetected—for prolonged intervals of time,” with some alerts going unreviewed for years.[4]
- Buyer Due Diligence (“CDD”) Failures: FinCEN discovered systemic “failures in conducting CDD at onboarding and on an ongoing foundation,” citing a number of “relationships that posed heightened AML threat however weren’t recognized or monitored as such.” At onboarding, Canaccord utilized “the identical, fundamental diligence for all clients with out consideration of the chance the client posed.” Because of this, “larger‑threat candidates had been topic to the identical degree of CDD as decrease‑threat buyer candidates,” and the Agency “lacked processes to fairly handle purple flags” at account opening, together with for international monetary establishments posing elevated AML dangers. Ongoing CDD was equally poor: for a major interval, Canaccord had not “applied a course of to constantly replace clients’ due diligence recordsdata after the client’s preliminary onboarding,” and when a course of was launched in November 2023, it was not retroactively utilized to current clients. FinCEN recognized quite a few excessive‑threat clients that weren’t topic to applicable CDD.
- Correspondent Banking Due Diligence Failures: Along with the failures with regard to CDD usually, the FinCEN enforcement motion particularly notes that “Canaccord operated international monetary establishment correspondent accounts with out confirming that the client data glad regulatory necessities” and constantly didn’t require and even request “vital data,” together with the “nature of the international monetary establishment’s enterprise and the markets it serves” as a way to “correctly mitigate the dangers related to such accounts.” For instance, Canaccord onboarded a Bahamas-based international financial institution with out conducting enough due diligence and didn’t conduct enhanced due diligence even after the Agency’s BSA Officer, legislation enforcement, and one other monetary establishment raised issues concerning the consumer.
- Failure to Report Suspicious Exercise: FinCEN discovered that Canaccord’s management failures allowed its platform to be “utilized by illicit actors engaged in securities fraud,” whereas the Agency didn’t report suspicious exercise “regardless of readily obvious purple flags.” A preliminary SAR lookback by an impartial advisor retained by the Agency recognized a minimum of 160 SARs that ought to have been filed. FinCEN cited a number of examples involving “market manipulation” of microcap securities, together with cases through which Canaccord, regardless of its “position as a market maker shopping for and promoting hundreds of thousands of shares,” “didn’t detect purple flags of suspicious exercise.” In a single case, following an SEC buying and selling suspension citing “uncommon and unexplained market exercise,” the Agency “resumed buying and selling within the enterprise’ inventory and didn’t seem to evaluate its personal exercise.” Regardless of an inner advice to file a SAR, Canaccord “by no means filed a SAR on suspicious transactions” involving the inventory.
- SEC Order: Equally, the SEC’s Order addressed the Agency’s failure to file SARs from February 2019 by March 2022 in violation of Trade Act Rule 17a-8.[5] The SEC famous that the Agency didn’t file SARs throughout this era regarding suspicious exercise involving “pump and dump schemes,” cases the place a “single or small variety of merchants” made up “a good portion of buying and selling quantity in a thinly traded or low-priced safety,” and “vital buying and selling in a thinly traded or low-priced safety main as much as and/or following a Fee buying and selling suspension.” The SEC famous remedial acts undertaken by the Agency, together with “a rise in AML compliance staffing, up to date AML exception studies, revised processes for SAR consideration and submitting, retention of third-party consultants to conduct a complete evaluate of the Agency’s AML compliance program, new supervision and evaluate protocols, and new commerce surveillance instruments.”
In assessing the $80 million civil cash penalty, FinCEN utilized the components set forth in its 2020 Assertion on Enforcement of the BSA. FinCEN emphasised that Canaccord’s deficiencies affected basic features of its AML program, continued over an prolonged interval, and resulted in vital hurt to traders by fraud schemes. FinCEN credited the FINRA and SEC penalties in opposition to the $80 million penalty and suspended $5 million of the penalty primarily based on Canaccord’s completion of the SAR lookback, leading to a web cost of $35 million to the Division of the Treasury.
Within the enforcement motion, FinCEN emphasised that AML applications should be threat‑primarily based and commensurate with the dangers posed by a agency’s enterprise mannequin, together with fraud dangers inherent in microcap and penny inventory buying and selling. The Canaccord decision highlights regulators’ expectations that dealer‑sellers make investments adequately in transaction monitoring programs, knowledge high quality, staffing, and coaching, notably the place larger‑threat merchandise or clients are concerned.
The motion coincides with the March 2026 launch of the U.S. Division of the Treasury’s 2026 Nationwide Cash Laundering Threat Evaluation.[6] Amongst different areas, it addresses the cash laundering dangers posed by broker-dealers, noting that “broker-dealers have publicity from clients in search of to disguise illicit proceeds inside in any other case authentic trades or have interaction in fraudulent buying and selling exercise (e.g., pump-and-dump schemes involving low-priced securities).” The Consent Order observes that “clients primarily based in high-risk jurisdictions impose different AML/CFT-related dangers on broker-dealers, reminiscent of these related to their supply of wealth or the counterparties with which they might transact.”
The Canaccord enforcement motion marks the most important FinCEN enforcement motion in opposition to a broker-dealer, reinforcing a development of regulators bringing AML and sanctions-related enforcement actions in opposition to broker-dealers. Up to now two calendar years, the SEC introduced 12 enforcement actions in opposition to broker-dealers in reference to AML failures and FINRA introduced 34 such enforcement actions.[7]
Along with AML obligations, broker-dealers should adjust to OFAC sanctions rules. On March 17, 2026, OFAC imposed a civil penalty in opposition to TradeStation Securities, Inc., a Florida-based brokerage agency for allegedly “provid[ing] funding providers to clients positioned in Iran, Syria, and the Crimea area of Ukraine” primarily based on failures within the agency’s geo-blocking programs and failures to check or validate these programs. OFAC famous that the motion highlights “the significance of standard testing and auditing to make sure sanctions compliance controls are successfully mitigating threat and stopping sanctions violations.”[8] Equally, as famous in our 2025 Yr in Assessment report, OFAC introduced an enforcement motion in opposition to broker-dealer Interactive Brokers LLC in July 2025 for offering brokerage and funding providers to greater than 200 accountholders positioned in comprehensively sanctioned jurisdictions, leading to practically 12,000 obvious violations.[9] OFAC highlighted that broker-dealers making use of real-time automated programs to handle giant quantities of transactional exercise “ought to think about applicable investments to make sure the modernization of their sanctions compliance applications alongside the innovation and growth of their customer-facing platform applied sciences that work together with the U.S. monetary system.”
Wanting forward, the SEC’s examination priorities for FY2026 recommend that the Division of Examinations will proceed to deal with broker-dealers’ AML applications, noting that AML “applications needs to be tailor-made to deal with the dangers related to a agency’s location, measurement, and actions, together with the purchasers they serve, the forms of services supplied, and the way these services are supplied.”[10] The SEC famous that examiners will “proceed to deal with AML applications and evaluate whether or not broker-dealers” are taking applicable measures, together with “appropriately tailoring and updating their AML program to their enterprise mannequin and related AML dangers.”[11]
Given this sustained regulatory consideration, dealer‑sellers could want to think about proactively reviewing their AML and sanctions compliance applications to make sure they’re appropriately tailor-made, adequately resourced, and aligned with regulatory expectations.
[1] FinCEN, “FinCEN Assesses Historic $80 Million Penalty Towards Canaccord Genuity LLC for Securities Fraud-Associated Financial institution Secrecy Act Violations” (Mar. 6, 2026), obtainable right here (the “FinCEN Penalty”).
[2] Id.
[3] Id.; U.S. Securities and Trade Fee, “SEC Prices Registered Dealer-Supplier Canaccord Genuity LLC with Failing to File Suspicious Exercise Reviews,” (March 6, 2026), obtainable right here (the “SEC Penalty”).
[4] In 2021, Canaccord decided that sure opinions required underneath its insurance policies “weren’t carried out” and that “sure staff had falsified documentation of their purported opinions.” See SEC Penalty. Canaccord reported these points to FINRA and “subsequently terminated these staff after finishing an investigation of the problem.” Id.; FinCEN Penalty.
[5] Trade Act Rule 17a-8, promulgated underneath Part 17(a) of the Securities Trade Act of 1934, requires broker-dealers registered with the SEC to adjust to the reporting, recordkeeping, and document retention necessities of the BSA, together with SAR-filing necessities. See SEC v. Alpine Sec. Corp., 308 F. Supp. 3d 775, 798–800 (S.D.N.Y. 2018), aff’d, 982 F.3d 68 (second Cir. 2020), cert. denied, 142 S. Ct. 461 (2021).
[6] U.S. Division of the Treasury, “2026 Nationwide Cash Laundering Threat Evaluation,” (March 2026), obtainable right here.
[7] Id. These replicate the evaluation interval of January 1, 2024 to December 31, 2025.
[8] OFAC, “TradeStation Securities, Inc. Settles with OFAC for $1,110,661 Associated to Obvious Violations of A number of Sanctions Regulation,” March 17, 2026 (obtainable right here).
[9] Paul, Weiss, “Financial Sanctions and Anti-Cash Laundering Developments: 2025 Yr in Assessment,” obtainable right here.
[10] U.S. Securities and Trade Fee Division of Examinations, “Examination Priorities,” (November 2025), obtainable right here.
[11] The SEC additionally famous that examiners will evaluate whether or not broker-dealers are “accounting for dangers related to omnibus accounts maintained for international monetary establishments; [] adequately conducting impartial testing; [] establishing an satisfactory buyer identification program, together with for helpful house owners of authorized entity clients; and [] assembly their Suspicious Exercise Report submitting obligations.”
Jessica S. Carey, Roberto J. Gonzalez, Janus Schutte are Companions, and Samuel Kleiner is counsel at Paul, Weiss Rifkind, Wharton & Garrison LLP. This put up first appeared as Memo for the agency.
The views, opinions and positions expressed inside all posts are these of the creator(s) alone and don’t characterize these of the Program on Company Compliance and Enforcement (PCCE) or of the New York College Faculty of Legislation. PCCE makes no representations as to the accuracy, completeness and validity or any statements made on this website and won’t be liable any errors, omissions or representations. The copyright of this content material belongs to the creator(s) and any legal responsibility almost about infringement of mental property rights stays with the creator(s).
by Jessica S. Carey, Roberto J. Gonzalez, Janus Schutte, and Samuel Kleiner
From Left to Proper: Jessica S. Carey, Roberto J. Gonzalez, Janus Schutte, and Samuel Kleiner (images courtesy of Paul, Weiss Rifkind, Wharton & Garrison LLP)
On March 6, 2026, the U.S. Division of the Treasury’s Monetary Crimes Enforcement Community (“FinCEN”) introduced a consent order with an $80 million civil cash penalty in opposition to Canaccord Genuity LLC (“Canaccord” or the “Agency”), an SEC-registered broker-dealer, for violations of the Financial institution Secrecy Act (“BSA”) in the course of the interval March 2018 to June 2024.[1] FinCEN famous that this enforcement motion marks “the most important penalty ever imposed in opposition to a broker-dealer for violating the BSA,” and FinCEN Director Andrea Gacki said that this motion is as “a wake-up name to broker-dealers that willfully fail to adjust to their obligations to safeguard the monetary system from illicit actors.”[2] The Securities and Trade Fee (“SEC”) and Monetary Trade Regulatory Authority (“FINRA”) individually introduced resolutions with the corporate for $20 million every, with FinCEN crediting Canaccord’s cost of these penalties.[3]
These coordinated enforcement actions underscore regulators’ continued deal with broker-dealers’ anti‑cash laundering (“AML”) applications. FinCEN’s findings emphasize that AML applications should be threat‑primarily based, adequately resourced, and supported by efficient knowledge and governance. On this memorandum, we talk about the enforcement actions and supply key takeaways for broker-dealers.
The Consent Order targeted on the Agency’s position as an “lively market maker[] in OTC low-volume and low-priced securities,” notably between 2018 and 2022. FinCEN famous that regulators have “repeatedly highlighted heightened dangers and ‘purple flags’ related to these kind of securities,” together with as a result of they “usually lack public data, don’t have any minimal itemizing requirements, lack liquidity, and have excessive volatility.”
Overview: FinCEN’s findings coated “a number of totally different points, however at its core, Canaccord didn’t dedicate satisfactory assets to make sure compliance with the BSA.” FinCEN famous that the Agency didn’t “sufficiently put money into the hiring, coaching, and oversight of AML personnel,” and studies “usually went unreviewed for months or years at a time by AML personnel.” FinCEN famous that the assets devoted to the Agency’s AML program had been “insufficient to handle the dangers the Agency’s enterprise mannequin entailed,” and for a few years “the staff accountable for reviewing Canaccord’s full suite of studies consisted of simply 4 staff, all of whom had further duties.” Additional, the Agency had no formal AML compliance coaching previous to November 2021. Common exams by FINRA recognized “deficiencies in Canaccord’s AML program, together with Canaccord’s failure to implement an satisfactory program for detecting and reporting suspicious exercise,” however Canaccord allegedly didn’t remediate the problems. Canaccord additionally allegedly didn’t conduct satisfactory impartial testing, with audit studies reflecting an “insufficient understanding of the dangers offered” by Canaccord’s enterprise traces and failing to establish “obvious gaps” in its controls.
The key AML points recognized by FinCEN embrace:
- Deficiencies within the Agency’s Commerce Surveillance Reviews: To watch for probably suspicious exercise, the Agency relied on “commerce surveillance studies” that FinCEN discovered suffered from “basic design flaws and longstanding knowledge points.” Sure studies had been generated utilizing a “handbook filter” designed to “handle the scope of the evaluate,” together with using “arbitrary numbers” with out “consideration for the precise threat profile of transactions captured by the report.” Because of this, thresholds had been “not cheap” underneath a threat‑primarily based framework, and a few studies had been “merely ‘too lengthy’ to evaluate.” These design and knowledge weaknesses had been compounded by extreme resourcing and governance failures. Oversight of this system was delegated to a Head of Buying and selling Compliance who “lacked prior AML expertise” and acquired minimal coaching, whereas “simply 4 Canaccord staff”—every with different non-trade surveillance duties—had been accountable for “reviewing greater than 100 distinctive studies,” lots of which had been run every day. FinCEN discovered that these deficiencies “brought about vital studies to go unreviewed—and suspicious exercise undetected—for prolonged intervals of time,” with some alerts going unreviewed for years.[4]
- Buyer Due Diligence (“CDD”) Failures: FinCEN discovered systemic “failures in conducting CDD at onboarding and on an ongoing foundation,” citing a number of “relationships that posed heightened AML threat however weren’t recognized or monitored as such.” At onboarding, Canaccord utilized “the identical, fundamental diligence for all clients with out consideration of the chance the client posed.” Because of this, “larger‑threat candidates had been topic to the identical degree of CDD as decrease‑threat buyer candidates,” and the Agency “lacked processes to fairly handle purple flags” at account opening, together with for international monetary establishments posing elevated AML dangers. Ongoing CDD was equally poor: for a major interval, Canaccord had not “applied a course of to constantly replace clients’ due diligence recordsdata after the client’s preliminary onboarding,” and when a course of was launched in November 2023, it was not retroactively utilized to current clients. FinCEN recognized quite a few excessive‑threat clients that weren’t topic to applicable CDD.
- Correspondent Banking Due Diligence Failures: Along with the failures with regard to CDD usually, the FinCEN enforcement motion particularly notes that “Canaccord operated international monetary establishment correspondent accounts with out confirming that the client data glad regulatory necessities” and constantly didn’t require and even request “vital data,” together with the “nature of the international monetary establishment’s enterprise and the markets it serves” as a way to “correctly mitigate the dangers related to such accounts.” For instance, Canaccord onboarded a Bahamas-based international financial institution with out conducting enough due diligence and didn’t conduct enhanced due diligence even after the Agency’s BSA Officer, legislation enforcement, and one other monetary establishment raised issues concerning the consumer.
- Failure to Report Suspicious Exercise: FinCEN discovered that Canaccord’s management failures allowed its platform to be “utilized by illicit actors engaged in securities fraud,” whereas the Agency didn’t report suspicious exercise “regardless of readily obvious purple flags.” A preliminary SAR lookback by an impartial advisor retained by the Agency recognized a minimum of 160 SARs that ought to have been filed. FinCEN cited a number of examples involving “market manipulation” of microcap securities, together with cases through which Canaccord, regardless of its “position as a market maker shopping for and promoting hundreds of thousands of shares,” “didn’t detect purple flags of suspicious exercise.” In a single case, following an SEC buying and selling suspension citing “uncommon and unexplained market exercise,” the Agency “resumed buying and selling within the enterprise’ inventory and didn’t seem to evaluate its personal exercise.” Regardless of an inner advice to file a SAR, Canaccord “by no means filed a SAR on suspicious transactions” involving the inventory.
- SEC Order: Equally, the SEC’s Order addressed the Agency’s failure to file SARs from February 2019 by March 2022 in violation of Trade Act Rule 17a-8.[5] The SEC famous that the Agency didn’t file SARs throughout this era regarding suspicious exercise involving “pump and dump schemes,” cases the place a “single or small variety of merchants” made up “a good portion of buying and selling quantity in a thinly traded or low-priced safety,” and “vital buying and selling in a thinly traded or low-priced safety main as much as and/or following a Fee buying and selling suspension.” The SEC famous remedial acts undertaken by the Agency, together with “a rise in AML compliance staffing, up to date AML exception studies, revised processes for SAR consideration and submitting, retention of third-party consultants to conduct a complete evaluate of the Agency’s AML compliance program, new supervision and evaluate protocols, and new commerce surveillance instruments.”
In assessing the $80 million civil cash penalty, FinCEN utilized the components set forth in its 2020 Assertion on Enforcement of the BSA. FinCEN emphasised that Canaccord’s deficiencies affected basic features of its AML program, continued over an prolonged interval, and resulted in vital hurt to traders by fraud schemes. FinCEN credited the FINRA and SEC penalties in opposition to the $80 million penalty and suspended $5 million of the penalty primarily based on Canaccord’s completion of the SAR lookback, leading to a web cost of $35 million to the Division of the Treasury.
Within the enforcement motion, FinCEN emphasised that AML applications should be threat‑primarily based and commensurate with the dangers posed by a agency’s enterprise mannequin, together with fraud dangers inherent in microcap and penny inventory buying and selling. The Canaccord decision highlights regulators’ expectations that dealer‑sellers make investments adequately in transaction monitoring programs, knowledge high quality, staffing, and coaching, notably the place larger‑threat merchandise or clients are concerned.
The motion coincides with the March 2026 launch of the U.S. Division of the Treasury’s 2026 Nationwide Cash Laundering Threat Evaluation.[6] Amongst different areas, it addresses the cash laundering dangers posed by broker-dealers, noting that “broker-dealers have publicity from clients in search of to disguise illicit proceeds inside in any other case authentic trades or have interaction in fraudulent buying and selling exercise (e.g., pump-and-dump schemes involving low-priced securities).” The Consent Order observes that “clients primarily based in high-risk jurisdictions impose different AML/CFT-related dangers on broker-dealers, reminiscent of these related to their supply of wealth or the counterparties with which they might transact.”
The Canaccord enforcement motion marks the most important FinCEN enforcement motion in opposition to a broker-dealer, reinforcing a development of regulators bringing AML and sanctions-related enforcement actions in opposition to broker-dealers. Up to now two calendar years, the SEC introduced 12 enforcement actions in opposition to broker-dealers in reference to AML failures and FINRA introduced 34 such enforcement actions.[7]
Along with AML obligations, broker-dealers should adjust to OFAC sanctions rules. On March 17, 2026, OFAC imposed a civil penalty in opposition to TradeStation Securities, Inc., a Florida-based brokerage agency for allegedly “provid[ing] funding providers to clients positioned in Iran, Syria, and the Crimea area of Ukraine” primarily based on failures within the agency’s geo-blocking programs and failures to check or validate these programs. OFAC famous that the motion highlights “the significance of standard testing and auditing to make sure sanctions compliance controls are successfully mitigating threat and stopping sanctions violations.”[8] Equally, as famous in our 2025 Yr in Assessment report, OFAC introduced an enforcement motion in opposition to broker-dealer Interactive Brokers LLC in July 2025 for offering brokerage and funding providers to greater than 200 accountholders positioned in comprehensively sanctioned jurisdictions, leading to practically 12,000 obvious violations.[9] OFAC highlighted that broker-dealers making use of real-time automated programs to handle giant quantities of transactional exercise “ought to think about applicable investments to make sure the modernization of their sanctions compliance applications alongside the innovation and growth of their customer-facing platform applied sciences that work together with the U.S. monetary system.”
Wanting forward, the SEC’s examination priorities for FY2026 recommend that the Division of Examinations will proceed to deal with broker-dealers’ AML applications, noting that AML “applications needs to be tailor-made to deal with the dangers related to a agency’s location, measurement, and actions, together with the purchasers they serve, the forms of services supplied, and the way these services are supplied.”[10] The SEC famous that examiners will “proceed to deal with AML applications and evaluate whether or not broker-dealers” are taking applicable measures, together with “appropriately tailoring and updating their AML program to their enterprise mannequin and related AML dangers.”[11]
Given this sustained regulatory consideration, dealer‑sellers could want to think about proactively reviewing their AML and sanctions compliance applications to make sure they’re appropriately tailor-made, adequately resourced, and aligned with regulatory expectations.
[1] FinCEN, “FinCEN Assesses Historic $80 Million Penalty Towards Canaccord Genuity LLC for Securities Fraud-Associated Financial institution Secrecy Act Violations” (Mar. 6, 2026), obtainable right here (the “FinCEN Penalty”).
[2] Id.
[3] Id.; U.S. Securities and Trade Fee, “SEC Prices Registered Dealer-Supplier Canaccord Genuity LLC with Failing to File Suspicious Exercise Reviews,” (March 6, 2026), obtainable right here (the “SEC Penalty”).
[4] In 2021, Canaccord decided that sure opinions required underneath its insurance policies “weren’t carried out” and that “sure staff had falsified documentation of their purported opinions.” See SEC Penalty. Canaccord reported these points to FINRA and “subsequently terminated these staff after finishing an investigation of the problem.” Id.; FinCEN Penalty.
[5] Trade Act Rule 17a-8, promulgated underneath Part 17(a) of the Securities Trade Act of 1934, requires broker-dealers registered with the SEC to adjust to the reporting, recordkeeping, and document retention necessities of the BSA, together with SAR-filing necessities. See SEC v. Alpine Sec. Corp., 308 F. Supp. 3d 775, 798–800 (S.D.N.Y. 2018), aff’d, 982 F.3d 68 (second Cir. 2020), cert. denied, 142 S. Ct. 461 (2021).
[6] U.S. Division of the Treasury, “2026 Nationwide Cash Laundering Threat Evaluation,” (March 2026), obtainable right here.
[7] Id. These replicate the evaluation interval of January 1, 2024 to December 31, 2025.
[8] OFAC, “TradeStation Securities, Inc. Settles with OFAC for $1,110,661 Associated to Obvious Violations of A number of Sanctions Regulation,” March 17, 2026 (obtainable right here).
[9] Paul, Weiss, “Financial Sanctions and Anti-Cash Laundering Developments: 2025 Yr in Assessment,” obtainable right here.
[10] U.S. Securities and Trade Fee Division of Examinations, “Examination Priorities,” (November 2025), obtainable right here.
[11] The SEC additionally famous that examiners will evaluate whether or not broker-dealers are “accounting for dangers related to omnibus accounts maintained for international monetary establishments; [] adequately conducting impartial testing; [] establishing an satisfactory buyer identification program, together with for helpful house owners of authorized entity clients; and [] assembly their Suspicious Exercise Report submitting obligations.”
Jessica S. Carey, Roberto J. Gonzalez, Janus Schutte are Companions, and Samuel Kleiner is counsel at Paul, Weiss Rifkind, Wharton & Garrison LLP. This put up first appeared as Memo for the agency.
The views, opinions and positions expressed inside all posts are these of the creator(s) alone and don’t characterize these of the Program on Company Compliance and Enforcement (PCCE) or of the New York College Faculty of Legislation. PCCE makes no representations as to the accuracy, completeness and validity or any statements made on this website and won’t be liable any errors, omissions or representations. The copyright of this content material belongs to the creator(s) and any legal responsibility almost about infringement of mental property rights stays with the creator(s).
